JSW Paints Ltd, in collaboration with JTPM Metal Traders Ltd and JSW EduInfra Private Ltd, has announced an open offer to acquire up to 26% of Akzo Nobel India Ltd's equity share capital. This move follows JSW Paints' earlier announcement of a ₹12,915-crore deal to acquire Akzo Nobel India, positioning itself to become the fourth-largest player in India's paint industry.

Open Offer Details

• Offer Size: Up to 1,18,40,482 shares (26% of equity share capital)
• Offer Price: ₹3,231.77 per share
• Total Offer Value: Approximately ₹2,997.11 crore
• Offer Manager: Morgan Stanley India Company Private Ltd

Key Points

• The offer size may be reduced to ensure the acquirer's combined shareholding doesn't exceed 75% of voting capital.
• If fully subscribed, the maximum size could be reduced to 92,73,902 shares, representing around 20.36% of voting capital.
• This open offer is part of JSW Paints' larger acquisition strategy for Akzo Nobel India.

Acquisition Strategy

Market Impact

Akzo Nobel India's shares closed at ₹3,345.00, up 0.12%, reflecting market reaction to the announcement.

This strategic move by JSW Paints signifies a major consolidation in India's paint industry, potentially reshaping the competitive landscape. The acquisition aims to elevate JSW Paints' position in the market, challenging the existing hierarchy of paint manufacturers in the country.

JSW Paints , a relatively new entrant in the Indian paint industry, is making a bold move to significantly expand its market presence. The company has recently applied to the Competition Commission of India (CCI) for approval to acquire a majority stake in Akzo Nobel India, in a deal valued at Rs 12,915.00 crore.

Acquisition Details

The proposed transaction involves a two-step process:

1. Share Purchase Agreement: JSW Paints plans to acquire a 74.76% stake in Akzo Nobel India for Rs 8,986.00 crore.
2. Mandatory Open Offer: Following the initial purchase, JSW Paints will make an open offer to acquire an additional 25% stake from public shareholders, potentially worth up to Rs 3,929.06 crore.

Impact on Market Position

If successful, this acquisition would catapult JSW Paints to become the fourth-largest player in India's competitive paint industry. This is a significant leap for the company, which only entered the paint segment in 2019 as part of the $23 billion JSW Group's diversification strategy.

About Akzo Nobel India

Akzo Nobel India is a well-established player in the Indian paint market, operating several decorative and industrial paint brands, including:

• Dulux
• International
• Sikkens

The company reported a revenue of Rs 4,091.21 crore, highlighting its strong market presence and financial performance.

Deal Specifics

As part of the agreement, Akzo Nobel's Dutch parent company will:

• Retain ownership of the India Powder Coatings business
• Continue to operate the International Research Centre in India

Both JSW Paints and Akzo Nobel have stated that the proposed deal does not raise any competition concerns in the relevant markets.

Industry Implications

This acquisition, if approved, could potentially reshape the landscape of the Indian paint industry. It demonstrates JSW Paints' ambition to rapidly scale up its operations and compete with established players in the market.

The move also reflects the growing attractiveness of the Indian paint market, which has been seeing robust growth driven by increasing urbanization, rising disposable incomes, and a booming real estate sector.

As the regulatory approval process unfolds, industry observers will be keenly watching how this deal might influence market dynamics, pricing strategies, and innovation in the Indian paint sector.