Akzo Nobel shares jump 6% after promoters announce India business sale to JSW Paints

The promoters of Akzo Nobel India have executed a share purchase pact with JSW Paints, the former said in an exchange filing on Friday, June 27, thereby confirming a CNBC-TV18 newsbreak.

The deal has been announced at a price of ₹2,762.05 per share, which is a 16% discount to Akzo Nobel's price on Thursday. This takes the total transaction value to ₹9,400 crore.

While the first stake purchase will be done for a sum of ₹8,986 crore, there will also be certain contingent consideration amounts worth ₹447 crore, that may become payable going forward.

Akzo Nobel India's promoters will sell their entire 74.76% stake they hold to JSW Paints. Promoters will be selling their stake in Imperial Chemicals, Akzo Nobel Coating .

Parth Jindal, Managing Director of JSW Paints, in an exclusive conversation with Shereen Bhan at the World Economic Forum summit in Davos on January 23

this year, had described the Akzo Nobel India stake sale as an “exciting opportunity” and vowed to give “everything” in the battle to acquire the assets.

“There is no choice... I have to give everything I've got for Akzo Nobel India,” Jindal had said back then.

Amnish Agarwal of Prabhudas Lilladher told CNBC-TV18 that the deal is at a big discount, especially when Akzo Nobel was already trading at a discount to its peers.

He now expects the industry dynamics to be more fierce, given the increased competitive intensity and that the industry market share picture will continue to be redrawn for the next few years.

Shares of Akzo Nobel India had opened lower on Friday but have quickly recoverd their losses to trade 4% higher at ₹3,316. The stock is down 32% from its 52-week high of ₹4,674.

This is a developing story.