Shares of Akzo Nobel India Ltd skyrocketed 10% on 27 June after JSW Paints agreed to acquire up to a 74.76% stake in the company.

JSW Paints has agreed to buy up to a 74.76% share in Akzo Nobel India from its parent firm and affiliates for up to Rs 8,986 crore, subject to final adjustments, according to a filing on 27 June. The merger will require clearance from India’s Competition Commission, and it will include an obligatory open offer to public shareholders.

JSW Paints will buy Akzo Nobel India for Rs 2,762.05 per share, representing a 16% reduction from the current market price. Furthermore, contingent consideration of up to Rs 447 crore may be due upon the conclusion of the acquisition.

Akzo Nobel India received a binding offer earlier this year from its parent firm, Akzo Nobel N.V., to purchase its powder coatings business and international R&D centre. The corporation intends to sell both units on a slump basis as going companies. The powder coatings business is worth Rs 2,073 crore, while the R&D centre is expected to be sold for Rs 70 crore.

Asit C. Mehta Investment Intermediates Research said, “The silver lining in the near term will be the expected dividend payout by the company, from the net proceeds of these transactions, which amounts to Rs 990 crore. Net of tax of 14%, this could lead to a dividend per share up to Rs 187, if the entire amount is distributed. However, the timing of the same is unknown.”

At 11:42 pm, the shares of Akzo Nobel were trading 8.05% higher at Rs 3,446.10 on NSE.

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