AkzoNobel NV has decided to pivot its India business model, shifting towards royalty-based income after selling its decorative paints division to billionaire Sajjan Jindal’s JSW Paints. Company executives confirmed the move during a recent investor and analyst call, framing it as part of a broader portfolio realignment across Asia.
Decorative Paints Exit, Powder Coatings Stay
As part of the ₹9,000-crore transaction, AkzoNobel will divest its decorative paints and liquid coatings operations, including the well-known ‘Dulux’ brand. However, it plans to retain its high-margin powder coatings business, keeping a foothold in the Indian market through premium technology offerings.
4.5% Royalty Keeps AkzoNobel Linked to India
Even after the sale, AkzoNobel will continue to earn a 4.5% royalty on sales of its coatings business, thanks to technology it still owns. CEO Gregoire Poux-Guillaume explained, “We’re not just selling and walking away. The 4.5% royalty ensures we retain a presence and continue to service MNC and institutional clients in India through technology licensing.” The arrangement preserves AkzoNobel’s technology and brand linkage in India without operational involvement.
Regulatory Clearances and Market Impact
The acquisition, announced in June, is currently awaiting regulatory approval, including a review by the Competition Commission of India (CCI). Once complete, JSW Paints — already among India’s fastest-growing paint makers — could explore a reverse merger, potentially listing itself while strengthening its position in the top five players of the industry.
India: A Key Market in AkzoNobel’s Asian Realignment
India, AkzoNobel’s fourth-largest paint market, generates around €400 million (₹4,000+ crore) annually, with decorative paints contributing 60% of the revenue. Under its new portfolio strategy, the company is exiting geographies where it lacks leadership in decorative paints while doubling down on industrial and marine coatings, which make up the remaining 40% of its India revenue. As reported by thehindubusinessline.com, by keeping a royalty-based revenue stream and its powder coatings segment, AkzoNobel aims to maintain a profitable presence in India while freeing resources for growth markets where it holds a leadership edge.
