Asian Paints CEO Amit Singhal has shown interest in acquiring some of the properties or assets of Dutch company AkzoNobel. He shares with CNBC TV18 Managing Editor Shireen Bhan at an IBLA jury meeting in Mumbai. According to him, Asian Paints is looking forward to capitalising on acquisition opportunities. Amit further provides some more insight into the ongoing integration in the industry. Let’s understand what benefits Asian Paints can get through this acquisition.
How Will Asian Paints Benefit From Acquiring Assets From AkzoNobel?
Asian Paints is the top manufacturer in the Indian paint industry. Its CEO recently showed interest in investing in AkzoNobel’s assets. At the IBLA jury meeting, he said Dutch paints giant AkzoNobel is reviewing its Indian portfolio. If it tries to sell some of its properties, Asian Paints will consider it. He also shows interest in some parts of the company’s business. The acquisition could help Asian Paints grow its business and expand its area by reaching new markets.
In addition, Asian Paints will also get access to intellectual properties and technology associated with the particular segment of the business. Sharing his views on integration, the CEO says that integration is just a normal industry process. Under this process, small companies work closely with large companies. It also gives the small company the advantage of their brand name and economies of scale. Acquisitions and integrations will make the existing company bigger. Thus, they will be able to save a lot on costs of production as well. However, he shows confidence in the growth of the company even without these acquisitions. According to him, the company can maintain its margins by 18-20%.
Market analysts and experts also predict that Asian Paints will maintain its position in the paint industry over the next five years despite its weak Q2 predictions. Asian Paints is already a trusted brand in India. The acquisitions will make that trust even stronger. If we talk about the company’s share performance, Asian Paints’ share price is Rs. 3,078.85 per share. It opened at Rs. 3,095.55 per share. While it will be closed at approx Rs. 3,086. The share falls by 0.30%. The weekly basis shows a fall of 3.42%.
According to the analysts’ ratings, if you already have the shares, you must hold them. The move of Asian Paints for acquisition will move the company towards creating a more concentrated market. As the market has fewer small and emerging players with few big players, the competition will increase. Stay tuned for more information.