US paints company Sherwin-Williams to acquire Nitco Paints

Cleveland-based, US paint major Sherwin-Williams marked its maiden entry into the fast-growing Indian paints market by agreeing to acquire Nitco Paints, an unlisted unit of Nitco Tiles, for an undisclosed amount, assumed to be on the lower side of Rs. 200 crores. Sherwin-Williams has also paid an undisclosed sum towards maintaining ties with flagship company and group concern Nitco Tiles. Nitco Tiles is expected to benefit due to the symbiotic relationship between tiles and paints and a common customer base. The Indian management would be retained for now to enable Sherwin-Williams to have a better understanding of the local market. Later, the company would explore the products and technologies to be introduced in India.

Nitco Paints makes and sells exterior specialty paints in western India through a network of about 3,000 dealers. It posted sales of Rs. 80 crores last year. The acquisition will give the US-based company an established presence in the Indian paint industry, which has historically grown by 1.5 to 2 times of the Indian GDP on a year-to-year basis.

Sherwin-Williams is present in other emerging markets such as China, Uruguay, Brazil and Argentina. The company has a distribution network in 20 other countries through wholly-owned subsidiaries, joint ventures and licenses of technology, trademarks and trade names.

Read The Economic Times and the Business Standard articles.
Related Post:
Sherwin Williams pursuing business options with Nitco Paints

Sherwin Williams pursuing business options with Nitco Paints

US-based paints company Sherwin Williams is believed to be in advanced stages of talks with Nitco Paints, an associate company of Mumbai-based Nitco Tiles, for a possible business tie-up. Nitco Tiles is engaged in the building business. Sherwin Williams is pursuing various options like joint venture, buyout and a joint holding company.

Sherwin Williams is the second-largest paint company in the world. Its entry in India is expected to change the dynamics of the colour space in the country, which is currently dominated by biggies like Asian Paints, Berger, Kansai Nerolac, ICI Paints and Shalimar. The paints segment in India is growing at an average 15%.

Read the article in DNA Money.

In a related development, Nitco Tiles Ltd also plans to spend $25-30 mn to acquire stake in a Chinese tile manufacturer within the next two months. Nitco will use the capacity in China to cut costs and to export tiles to other countries directly. The acquisition will be financed out of a proposed Rs. 250 crore-issue of securities to overseas investors or to qualified institutional buyers. The company has already obtained shareholder approval for the issue.

Read more on this in The Economic Times.