The race for AkzoNobel’s paint business has intensified with private equity (PE) majors joining the fray for not only the India unit but also for its South Asia portfolio. Warburg Pincus, Carlyle, and CVC Capital Partners are among the many PE firms eyeing the entire South Asia portfolio of the paint-maker, sources close to the development told businessline.
AkzoNobel’s South Asia portfolio includes the Dulux brand of paints across countries such as India, Pakistan, Nepal and Sri Lanka.
Meanwhile, for the India business, JSW Paints (with TPG) and Pidilite are in the running, with Indigo Paints also a possible contender. Asian Paints, Birla Opus, and Berger have opted out.
AkzoNobel has a premium, highly profitable position in India; and is the fourth largest player here. Market capitalisation wise it is placed in the ₹16,000 – 17,000 crore range, and the management is expecting premium valuation for the India-business – at 4-5x of annual turnover, which is in the ₹4,000 crore range.
“Some PE firms have been in touch for the purpose of strategic review and due diligence of the portfolio – the entire South Asia business including India. Some of them are looking at partners in India too, or they may go alone. Discussions are underway at the global level,” multiple sources said.
Warburg Pincus and Carlyle are yet to respond to queries. All the three PE firms have previously been involved in multiple transactions with Akzo. AkzoNobel India did not respond to mailed queries from businessline.
The Dutch paint-maker, Akzo Nobel NV, had in 2024 announced a portfolio review .
‘Discussions are on’
According to Gregoire Poux – Guillaume (Greg), CEO, Akzo Nobel NV, the South Asia portfolio is mainly India, and despite the “strong premium business” and profitability, it has low market share (less than 10 per cent). He confirmed discussions were on with decorative paint-makers for the India business.
Greg said, the company is “moving with speed” and has “no interest in dragging out this review.”
He further explained, the company is not considering the powder coatings business for strategic review. And this would be an “enabler for something ambitious on the liquid side (decorative paints business)”. The powder coatings business , which will be taken over by another subsidiary of Akzo, and valutations (in India) are underway.
Greg said during a recent investor call: “The players that we’re talking to in India are liquid coatings players. And actually, many of them are deco players”.
“So we’re looking at opportunities to make that business stronger(decorative paints)… all the way to disposal. You can see that there are people bidding on the business,” he added.
Pointers
* AkzoNobel is the owner of Dulux brand of paints and is the fourth ranked player in India.
*Review of South Asia including India business underway.
* The decorative paints business is being be sold for which bids have been invited
*Powder coatings business to be valued separately and then taken over by another subsidiary of Dutch parent, Akzo Nobel NV. Akzo NV has 75% stake in India biz.
* JSW (in partnership with TPG) and Pidilite among front-runners for the paints business in India . Asian Paints Berger and Birlas have opted out of the race
* Multiple PE players have niw express interest for South Asia and India business.
* AkzoNobel expects premium valuation for India business