Akzo Nobel plans to exit Indian market, decorative coatings business triggers bidding boom

global coatings giant Akzo Nobel recently announced that it is considering a full withdrawal from the Indian market and intends to sell its Akzo Nobel India. This strategic decision stems from a strategic review of the company's portfolio launched in October 2024 to reallocate capital and focus on its core coatings business. The decorative coatings business in South Asia is the focus of this assessment.

After an in-depth business review, AkzoNobel believes that the Indian market is "ripe for integration" and plans to explore a variety of possibilities, including forming partnerships, seeking business combinations and asset sales.

In the Indian market, AkzoNobel mainly relies on the "Dolles" brand operation and has developed into an important force in the Indian coatings industry, ranking fourth in the industry, second only to Asian coatings, Berger and Kansai Nerolac. The company has a market share of 5% to 7% in India, especially in the high-end coatings sector, with a market share of about 16% and a market value of more than 170 billion Indian rupees (about 14.4 billion yuan).

According to people familiar with the matter, the sale may make Akzo Nobel's valuation reach 250 billion Indian rupees (about 21.2 billion yuan), which is higher than the current market value. A number of companies in the market, including Berger, JSW, Indigo Paints and Asia Paints, have expressed strong interest in the business, but have not yet made a formal offer.

Among potential bidders, Berger and JSW are particularly interested. The two companies hope to take this opportunity to further expand their share in the Indian coatings market to cope with the increasingly fierce market competition. In recent years, the strong entry of Aditya Birla Group has significantly changed the competitive landscape of the market.

At the same time, AkzoNobel is looking to the European and Chinese markets for new business growth points. Berger and JSW are focused on the local market and plan to expand their presence in the Indian market to achieve sustainable development. JSW Paints has made it clear that it will invest up to Rs 10 billion crore for business expansion over the next 3 to 5 years.

Berger also said that it is carefully considering the acquisition of AkzoNobel's decorative coatings business, but stressed that the acquisition decision will be based on a reasonable valuation. Indigo Paints is still in the evaluation stage and no bid decision has been made. Although Asian Coatings already holds a 4% stake in Akzo Nobel India, due to its huge share in the Indian market, the acquisition may face uncertainty in antitrust review.

It is worth noting that AkzoNobel has decided not to include the powder coatings business and R & D business in the scope of this sale, but plans to sell it to an independent indirect subsidiary with a valuation of approximately Rs 20 billion. It has been revealed that the evaluation work of decoration, industrial and project businesses is progressing in an orderly manner, and the non-tender bidding process is expected to be launched at the end of January or early February.

The strategic adjustment of AkzoNobel's India business will undoubtedly have a profound impact on the competitive landscape of the Indian coatings market. We will continue to focus on subsequent developments to gain insight into market changes.