AKZO NOBEL India Paint Business Valuation: 20-25% Discount on Bids Expected

With negotiations now moving into the advanced stage, core bidders for AkzoNobel’s Belgium-based paint vertical in India are questioning the premium being ascribed to the Dulux brand, sources said. Several of the bidders have informally communicated to merchant bankers and senior AkzoNobel executives that they also need to revise the pricing downwards, by around 20-25%, sources aware of the development said.

AkzoNobel is now seeking a valuation for its India operations within a range of ₹18,000–20,000 crore. But bidders argue that with pricing strategy concerns, the value should be nearer to ₹12,000 crore. Prospective bidders, merchant bankers and senior AkzoNobel executives are now negotiating as stakeholders negotiate the deal’s final terms.

The premium valuation though comes on the back of the strength of the Dulux brand in India’s decorative paints portion of a segment where it commands a dominant position. AkzoNobel’s India business is a Kolossus in the country, but strong competition from high-street players like Asian Paints and Berger Paints might have affected sentiments among potential bidders.

With competition brewing within the Indian paint space and shifting consumer preferences, investors are shying away from investing at the level of the valuation proposed initially. AkzoNobel offers strong long-term growth potential, but bidders are questioning whether the price being asked will be satisfactory for the future.

Industry watchers, meanwhile, have their attention trained on AkzoNobel’s response​s to​ claims over adjusting the value, while the outcome will likely have a huge impact not only on the form of the final deal but also on the ultimate structure.