Mumbai: Amsterdam-based Akzo Nobel NV, Europe’s largest paint maker, plans to exit India and has hired Citigroup to sell off Akzo Nobel India Ltd, the India entity listed on the bourses.
Key Indian players like the Adani Group, Aditya Birla Group, JSW Paints and Asian Paints are in the fray to buy out the Indian subsidiary, people aware of the development told Mint.
People in the know of the developments said the deal is likely to fetch the European company ₹25,000 crore, a premium over its current market cap of ₹17,254 crore. On Wednesday, the company’s stock traded 1.8% higher on the BSE at ₹3,806.
They said that all key bidders are keen to pay a premium for the business. Adani group, Aditya Birla group and JSW group have enough cash need to buy out Akzo Nobel India.
For the Adani and Aditya Birla groups, the plan aligns well with their larger strategy to build the materials business since both of them are into real estate, housing, and cement businesses.
The two groups are competing aggressively in the cement space with the Adani Group trying to acquire assets to match the market leader Ultratech Cement, an Aditya Birla Group company.
Another bidder is Asian Paints, which already owns 4% in Akzo Nobel India. Asian Paints is the market leader in the paints market and their acquisition would require approval from the anti-trust regulator, Competition Commission of India. Asian Paints commands a 53% market share in the Indian paints market, while Akzo Novel India, the seller of Dulux paints, has about 16% market share in the premium paints market.
Emails sent to Akzo Nobel NV, Citibank, Aditya Birla Group, Adani Group and JSW Group did not immediately respond to queries from Mint.
The request for proposals (RFPs) for the deal will be sent to the potential bidders in a month’s time, said the people in the know, adding that the takeover will entail an open offer since Akzo Nobel is listed.
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