American private equity giant Blackstone Inc. has entered the race to acquire the paints business of Akzo Nobel, which sells its products under the ‘Dulux’ brand.
JSW Group and Pidilite have also shown interest in the company.
Non-binding offers from all interested parties are expected by mid-March, with more private equity firms anticipated to join the race, according to a source close to the development.
While JSW Group is not expected to make an aggressive offer, Kolkata-based Berger Paints has already dropped out of the race citing high valuation.
Blackstone declined to comment.
“AkzoNobel is working towards redeploying capital to strengthen its core coatings businesses. The review is part of our ongoing strategy to focus our portfolio on areas where we can achieve differentiating scale and strengthen our position in key coatings businesses. The current market dynamics in South Asia/India represent significant opportunities to put deco South Asia in a better position for the future. We are at the beginning of the review process, and we are not speculating on outcomes at this stage,” said a Akzo Nobel NV spokesperson.
Bankers said Blackstone is in talks with Akzo Nobel on the assets which also includes paints business in Pakistan and Sri Lanka. The entry of cash rich private equity players would mean the valuations could rise which is bad news for Indian bidders, said a bidder, asking not to be quoted.
In a recent analyst call, Akzo Nobel NV said it expects the sale of the Indian business to conclude before 2025-end, with around 10 per cent of this business expected to be retained by Akzo (implied value of Akzo’s stake in Akzo India of €1.3 billion (Rs 11,822 crore), based on Akzo India’s current market cap).
The management emphasised that the preference remains for a full cash sale, analysts with JP Morgan said.
Akzo Nobel NV owns 74.76 per cent in the Indian entity. The Indian company’s shares are down 7 per cent since January this year.
