JSW Paints will buy Dutch paint maker Akzo Nobel's Indian arm in a deal valued at about 1.4 billion euros ($1.64 billion), including debt, expanding its paints portfolio amid intensifying competition in the country.
The deal comes amid mounting challenges for Indian paint makers, including volatile raw material costs, heightened competition following Grasim Industries' entry and weakening urban spending.
The transaction could be the Indian paint sector's biggest deal on record, data sourced from Dealogic and seen by Reuters showed.
Shares of Akzo Nobel India jumped more than 11% after the deal was announced on Friday, but are still down about 1.4% so far this year.
Akzo Nobel, the maker of Dulux Paint, had announced a review of its South Asia operations last year, looking to rein in costs and boost its core coatings business.
The Dutch parent, the fourth-largest paint maker in the world by market capilisation behind PPG, Nippon Paint and Sherwin-Williams, will continue to retain its research and development centers and industrial coatings business in India.
JSW Paints, launched in 2019 and part of the $23 billion JSW Group, will buy a 74.76% stake in Akzo Nobel India for 89.86 billion rupees ($1.05 billion) and launch an open offer for the roughly 25% held by public shareholders.
"While this acquisition offers JSW Paints a significant scale-up opportunity, near-term integration challenges could provide an opportunity for incumbent players to strengthen their market position in the luxury segment," Amit Purohit, senior vice president at Elara Capital.
Akzo Nobel is likely to rake in 900 million euros in net proceeds from the deal, which is expected to close in the fourth quarter of 2025.
