AkzoNobel, the largest paint manufacturer in Europe, initiated a strategic review of its operations in India last year. The company’s industrial coatings segment collaborates with various partners and requires advanced technological expertise. If any potential buyers express interest in acquiring the entire business, AkzoNobel may seek a valuation of up to $2 billion. However, it is also possible that AkzoNobel will only sell its paints division in India while retaining the industrial coatings segment, as three interested parties prepare to submit financial offers for the Dulux paint producer.
Pidilite Industries Ltd, JSW Paints, and Indigo Paints Ltd have progressed to the second round of negotiations with AkzoNobel, according to sources familiar with the situation. The company anticipates a valuation between $1.5 billion and $1.7 billion for its consumer paints division. On December 17, it was reported that Pidilite, Indigo Paints, and JSW are competing for Akzo Nobel India, whose parent company has engaged Citigroup to facilitate the sale of a 74.6% promoter stake.
Sources indicate that discussions imply a valuation of at least $1.5 billion to $1.7 billion for the business-to-consumer (B2C) segment alone. It is likely that one of the three contenders will acquire the consumer-facing paints division in this second round. Pidilite intends to make an independent bid, while JSW Paints may collaborate with private equity firms such as Blackstone or TPG. Indigo Paints could partner with Advent International or Warburg Pincus.
If AkzoNobel India opts to sell its industrial coatings division as well, it could aim for a valuation of up to $2.2 billion. Currently, Akzo Nobel India has a market valuation of $1.75 billion. Representatives from TPG, Warburg Pincus, and Advent Global have declined to comment, and inquiries sent to AkzoNobel NV, AkzoNobel India, Pidilite, JSW Group, Indigo Paints, and Blackstone have gone unanswered.
Selling the B2B coatings business presents challenges due to the protection of intellectual property rights and the existence of long-term agreements with industrial partners, which can last from 10 to 20 years. The coatings sector requires specialized technical knowledge and expertise in chemical technology, making it a complex sale. In the industrial coatings market, major players like Asian Paints Ltd have joint ventures with US-based PPG Inc., Kansai Nerolac has partnerships with ICRO Coatings and Polygel Industries, and Nippon Paints collaborates with Italy’s IVM Chemicals, among others.
