Equity holding of Akzo Nobel India Ltd's overseas parent is set to shoot up. After an off-market deal on January 31, the lone promoter entity – Imperial Chemical Industries Ltd – has increased its stake in ANIL by 3.23 per cent to 59.64 per cent.

The proposed merger of three wholly-owned Indian entities – Akzo Nobel Car Refinishes India Pvt Ltd, Akzo Nobel Chemicals (India) Limited and Akzo Nobel Coatings India Pvt Ltd – would catapult the promoter holding to 69.62 per cent, Mr Partha S Basu, CFO and Wholetime Director, told Business Line here on Tuesday.

The board of the company is meeting on February 14 to discuss a proposal for buyback of shares. If it comes through, it will obviously pave way for further increase in promoter holding.

In view of the proposed amalgamations, the company undertook revaluation exercise of ANIL and the merging companies. PwC, BMR Advisors and Grant Thornton were involved in the exercise to determine valuation and share swap ratio in a no-cash merger process. Fairness of the process was confirmed by independent merchant banker, according to management.

Mr Amit Jain, MD of ANIL said that in the light of the proposed merger, the board would also review the royalty arrangement with Akzo Nobel NV, the ultimate parent of ANIL on February 14 even though the current arrangement would expire on September 30, 2014. “The royalty will involve technology fee plus brand fee”, he added.

“With the proposed merger, our company will be in a better position to match and probably exceed the competition,” he told shareholders at a meeting to consider the merger proposal.

>Jayanta_mallick@thehindu.co.in

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