The competition for AkzoNobel’s paint business has heated up as major private equity (PE) firms vie for its South Asia portfolio, including the India unit.
Warburg Pincus, Carlyle, and CVC Capital Partners are now among the leading firms interested in acquiring the paint giant’s South Asia business, according to sources close to the negotiations.
AkzoNobel’s South Asia Portfolio
AkzoNobel’s South Asia portfolio encompasses the Dulux brand of paints, which operates across India, Pakistan, Nepal, and Sri Lanka.
The regional portfolio has attracted significant attention from PE firms, signaling a strong market presence in the region.
India Business: A Strong Contender in the Market
For the India business, the competition is equally fierce. JSW Paints, in collaboration with TPG, and Pidilite are actively pursuing the unit, while Indigo Paints could also be a potential buyer.
However, major players like Asian Paints, Birla Opus, and Berger have decided to exit the bidding process.
Despite these competitors, AkzoNobel holds a premium position in the Indian market. As the fourth-largest player in the country, it is valued in the ₹16,000 to ₹17,000 crore range.
The management is optimistic about securing a premium valuation for the India business, which generates annual turnover of approximately ₹4,000 crore. The expected valuation experts set for the India unit is 4-5 times the annual turnover.
Strategic Review and CEO’s Remarks
Gregoire Poux – Guillaume (Greg), CEO of AkzoNobel NV, confirmed that discussions regarding the India business are ongoing with potential buyers, particularly other decorative paint-makers.
He highlighted that the South Asia portfolio is primarily driven by India. It has strong profitability, though its market share is currently less than 10%.
The company, despite its premium position, focuses on gaining speed in its strategic review and aims to close the process promptly. Greg emphasized, “We have no interest in dragging out this review.”
Focus on Liquid Paints, Excluding Powder Coatings
Greg clarified that AkzoNobel is not considering its powder coatings business for review. The company plans to transfer this division to another subsidiary.
As reported by thehindubusinessline.com, the move is intended to support AkzoNobel’s more ambitious plans. These plans focus on the liquid side of its business, particularly decorative paints. Decorative paints are seen as a key growth driver for the company moving forward.
