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Akzo Nobel’s India operations, known for the iconic ‘Dulux’ brand, are being valued at a market capitalization of at least ?16,000 crore, a figure that market insiders describe as “a premium and slightly higher than expectations.” Non-binding bids for the business, excluding its powder coating and R&D segments, are expected to be invited soon, according to sources. At least four players, including Berger, JSW, and Indigo Paints, have expressed interest in the deal so far, although no formal offers have been made. Akzo Nobel India ranks as the fourth-largest paint manufacturer in the country, following Asian Paints, Berger, and Kansai Nerolac. The company holds a market share of 5-7%, compared to the combined 70% share commanded by Asian Paints and Berger. Its operations span decorative paints, automotive and specialty coatings, industrial coatings, marine coatings, and protective coatings. The company is particularly strong in the premium paints segment, supported by an extensive distribution network. The international promoters of Akzo Nobel have instructed the board to carve out its powder coatings business and international R&D operations into a separate indirect subsidiary. They have also directed the company to evaluate acquisition offers for the promoter’s stake. Citigroup Global is reportedly one of the investment bankers facilitating the deal. “Evaluation is ongoing for the decorative, industrial, and project businesses. Non-binding bids are anticipated by January-end or early February, after which more clarity on valuation will emerge,” said a source familiar with the matter. While Akzo Nobel India declined to comment on inquiries, Berger’s MD and CEO Abhijit Roy was unavailable for comment. Hemant Jalan, Chairman and MD of Indigo Paints, stated, “We are still evaluating and have not decided on a bid.” Market sources speculate that the ?16,000 crore valuation includes a premium, attributed to Akzo Nobel’s robust distribution network and strong positioning in the higher-end market. The company’s India operations are profitable, with the powder coatings and R&D segments valued at approximately ?2,000 crore. “This valuation appears slightly high, possibly reflecting a premium. However, concrete conclusions can only be drawn once non-binding bids are submitted and more financial details of the deal are disclosed,” noted one prospective bidder. Non-binding bids, also referred to as indicative offers, express interest in a deal without creating a legal obligation. They serve as a tool to outline terms between buyer and seller, facilitating further negotiations in the sales process. |
