Akzo Nobel India , a leading decorative and industrial paints company, is set to see a significant change in ownership as JSW Paints announces plans to acquire up to 26% stake in the company. The open offer, valued at ₹2,997.11 crore, marks a substantial move in the Indian paints sector.

Key Details of the Acquisition

• Offer Size: JSW Paints aims to acquire up to 1,18,40,482 fully paid-up equity shares, representing 26% of Akzo Nobel India's voting share capital.
• Offer Price: ₹3,231.77 per equity share.
• Total Consideration: Up to ₹2,997.11 crore, assuming full acceptance.

Strategic Implications

This acquisition is part of a larger transaction where JSW Paints has agreed to purchase up to 74.76% of Akzo Nobel India's voting share capital from its current promoters. The deal structure includes:

1. Direct acquisition of up to 3,40,44,335 equity shares (74.76%) from the current promoters.
2. An open offer to public shareholders for an additional 26% stake.

Financial Arrangements

JSW Paints has made firm financial arrangements for the offer:

• Escrow account established with Kotak Mahindra Bank Limited.
• Bank guarantee of ₹500.00 crore provided.
• Cash deposit of ₹42.00 crore made in the escrow account.

Market Impact

The acquisition is expected to significantly alter the competitive landscape of the Indian paints industry. JSW Paints, part of the $23 billion JSW Group, will gain substantial market share and access to Akzo Nobel India's established brand and distribution network.

Regulatory Approvals

The deal has received approval from the Competition Commission of India, a key regulatory requirement for its completion.

Outlook

This strategic move by JSW Paints underscores its ambition to expand its presence in the Indian paints market. The acquisition of Akzo Nobel India, with its strong market position and diverse product portfolio, is likely to accelerate JSW Paints' growth trajectory and enhance its competitive position in the industry.

Investors and industry observers will be keenly watching how this acquisition unfolds and its potential impact on the dynamics of the Indian paints sector.

Note: The open offer is subject to various terms and conditions as detailed in the Letter of Offer.

Akzo Nobel India , a prominent player in the Indian paint industry, witnessed a significant change in its shareholding structure as one of its key promoters, Imperial Chemical Industries Limited (ICIL), sold a substantial stake in the company. The sale comes amid JSW Group's plans to acquire a majority stake in Akzo Nobel India.

Promoter Stake Sale

Imperial Chemical Industries Limited, a promoter of Akzo Nobel India, sold 22.77 lakh shares, representing approximately 5% of the company's paid-up equity share capital. The transaction was executed through a block deal on the National Stock Exchange at an average price of ₹3,359.00 per share, totaling ₹765.00 crore.

Impact on Shareholding

Following the sale, Imperial Chemical Industries' holding in Akzo Nobel India decreased from 50.46% to 45.46%. This reduction has brought down the overall promoter shareholding in the company from 74.76% to 69.76%.

Institutional Buyers

The stake was acquired by several major institutional investors, including:

• Goldman Sachs
• Morgan Stanley
• Citigroup Global Markets Mauritius
• Nippon India Mutual Fund

These institutions, along with others, participated in the block deal, indicating strong interest in Akzo Nobel India's shares.

JSW Group's Acquisition Plans

In a parallel development, JSW Group has announced plans to raise ₹7,000.00 crore through non-convertible debentures (NCDs) to fund its acquisition of Akzo Nobel India through JSW Paints. The proposed bonds will have a tenure of four years and seven months, structured as zero-coupon instruments offering an 8.5% Internal Rate of Return (IRR).

JSW Paints has agreed to acquire up to a 75% stake in Akzo Nobel India for ₹8,986.00 crore. Additionally, the company will make a mandatory open offer for the remaining 25% stake, valued at approximately ₹3,929.00 crore.

Industry Impact

This acquisition, once completed, is set to position JSW Paints as the third-largest decorative paint company in India's ₹70,000.00 crore paint industry. The move signifies a major shift in the competitive landscape of the Indian paint sector.

Regulatory Compliance

Akzo Nobel India has duly informed the stock exchanges about the transaction, complying with the regulatory requirements under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has emphasized that Imperial Chemical Industries Limited continues to be one of its promoters despite the reduction in shareholding.

As the paint industry in India undergoes significant changes, market observers will be keenly watching the developments in Akzo Nobel India and the broader implications of JSW Group's entry into the decorative paints segment.