JSW Paints Acquires Akzo Nobel; Stock Ends Above Open Offer Price

Akzo Nobel Ltd.'s share price rose by 11% intraday on Friday following the announcement of majority stake acquisition by JSW Paints. The scrip settled 7.2% higher at Rs 3,418.6 apiece, higher than JSW's open offer price of Rs 3,417.77 per share.

The acquisition was formalised through a Share Purchase Agreement signed on June 27.

JSW Paints has entered into an SPA with Akzo Nobel's promoters, Imperial Chemical Industries Ltd and Akzo Nobel Coatings International B.V., who hold 50.46% and 24.30% of the company's shares, respectively. The share purchase pact is at Rs 9,403 crore.

The agreement stipulates that these promoters will sell their entire shareholding to JSW Paints, subject to the terms and conditions outlined in the SPA.

As a result of this transaction, JSW Paints, along with any persons acting in concert, will be required to make an open offer in accordance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. This move is expected to further consolidate JSW Paints' position in the market.

Currently, Akzo Nobel controls approximately 7% of paint market.

Akzo Nobel stock has risen 20.6% in the last 12 months.

Out of three analysts tracking the company, one maintains a 'buy' rating, two recommend a 'hold', according to Bloomberg data. The average 12-month consensus price target implies an upside of 7.3%.