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The JSW Group has secured INR 9,300 crore in financing to acquire Akzo Nobel India for INR 12,915 crore. This financing mix includes an INR 3,300 crore operating company-level debt from foreign lenders, a INR 3,000 crore convertible instrument from private credit funds, and a INR 3,000 crore loan against shares from domestic mutual funds. This acquisition aims to make JSW Paints India's fourth-largest paint company. The funding strategy also potentially includes proceeds from a recent INR 1,210 crore stake sale by promoters.
The JSW Group has recently secured a substantial financing package for a major acquisition in the Indian paints sector. This funding aims to support its strategic takeover of a prominent paint company, utilizing a mix of debt instruments, convertibles, and promoter-level loans. Advertisement
The JSW Group has secured INR 9,300 crore to acquire Akzo Nobel India. The acquisition deal, valued at INR 12,915 crore, was announced by JSW Paints on June 27. This strategic move aims to make JSW Paints India's fourth-largest paint company.
The INR 9,300 crore financing package is structured in three parts. The first part is an operating company-level debt of approximately INR 3,300 crore. This is being raised by JSW Paints through a group of foreign lenders, including SMBC, MUFG, Mizuho, Barclays, JPMorgan, and DBS. This loan is priced at 10% plus withholding tax. The second part involves a INR 3,000 crore convertible instrument, raised at the JSW Group's holding company level from private credit funds. The third part consists of about a INR 3,000 crore loan against shares, secured at the promoter level from domestic mutual funds like Kotak Mutual Fund. This part carries an interest rate of around 8.5% and is backed by shares of a listed group company.
In May, the Sajjan Jindal Family Trust, which promotes JSW Infrastructure, had sold a 2% stake in the company for INR 1,210 crore to meet SEBI's minimum public shareholding norms. This could also contribute to funding this acquisition. Acquisitions are a common strategy for companies to expand market share and diversify their portfolios. The paints industry in India is competitive, and this deal signals significant consolidation efforts by major industrial groups.
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