Akzo Nobel India Sells Powder Coatings Biz, R''D Centre for Rs 2,143 Cr

New Delhi, Feb 25 (PTI) Paint maker Akzo Nobel India will transfer its powder coatings business and international research and development (R&D) centre to its Dutch parent firm Akzo Nobel NV in a Rs 2,143-crore intergroup deal to streamline the company's business.

The board of Akzo Nobel India Ltd (ANIL) has accepted the binding offer from AkzoNobel NV, which includes Rs 2,073-crore slump sale of the powder coatings business and Rs 70 crore transfer of the international research centre, according to a late night regulatory filing on Monday from the company that operates in the decorative paint segment with brand 'Dulux'.

It has accepted the "sale and transfer of ANIL's powder coatings business and the international R&D on a slump sale basis as a going concern", which will allow ANIL to strengthen its position in its liquid paints and coatings business while divesting its existing non-core assets.

"Each of the aforesaid slump sale transactions will be undertaken through separate business transfer agreements with an indirect wholly owned subsidiary of Akzo Nobel NV, which is proposed to be incorporated in India, for a purchase consideration of Rs 2,073 crore and Rs 70 crore, respectively," it added.

ANIL's board had received the binding offer letter from Akzo Nobel NV, the ultimate holding/promoter company of the paint maker on Monday.

In addition, AkzoNobel India will acquire "intellectual property rights" of Akzo Nobel Coatings International BV for its decorative paints business in India, Bangladesh, Bhutan, and Nepal for a consideration of Rs 1,152 crore.

"These transactions will make Akzo Nobel India Ltd a more focused liquid paints and coatings business and enable it to become a fully brand-and-technology-independent company for its core decorative paints business," the statement said.

However, it added that the execution of these transactions is "subject to approval of the shareholders" of Akzo Nobel India and the supervisory board of Akzo Nobel NV.

"The rationale underpinning the aforesaid sale of the powder coatings business is to streamline the company's business, thereby allowing it to strengthen its position in its liquid paints and coatings business while divesting its existing noncore assets (relating to powder coatings business) which do not provide material synergies," it said.

The sale creates a more focused, efficient, and strategically aligned company with a clear roadmap for long-term value creation and success, ANIL added.

ANIL will seek its shareholders' approval in the coming weeks, with the voting process expected to conclude a month later, it added.

"Each slump sale transaction is expected to complete on or before December 31, 2025, subject to receipt of shareholders, regulatory, statutory and other approvals, as may be applicable," it said.

The company's revenue from operations of powder coatings was Rs 421.2 crore and Rs 53.5 crore from the international R&D centre.

The latest moves come after Akzo Nobel NV in October last year announced a strategic review of its portfolio in South Asia and said it is looking for strategic options, including partnerships, joint ventures, mergers or divestments. This is to deploy capital towards expanding its core coatings business.

Later in a regulatory filing, Akzo paints and coatings maker Akzo Nobel India on January 6 said it is exploring the sale of its powder coatings business and R&D operations to a separate indirect wholly owned arm, Akzo Nobel NV, following a request by the parent firm.

Besides, Akzo Nobel India has asked to explore the potential acquisition of decorative paints intellectual properties owned by Akzo Nobel NV, the company added.

Akzo Nobel India has a presence in a wide range of paints and coatings segments spanning from decorative paints; automotive and speciality coatings; industrial coatings; marine, protective and yacht coatings to powder coatings.

Its revenue from operations in FY24 was Rs 3,961.6 crore.