Mumbai, Sept. 5: Asian Paints today said it will acquire Berger International Ltd (BIL), a paint company listed on the Singapore Stock Exchange for Rs 58 crore by snapping up shares through an open offer.
The move marks the company’s attempt to give its business a stronger international tinge, and to become the fifth largest decorative paint company in the world. The acquisition will widen Asian Paint’s reach to 23 countries.
Asian Paints, with a group income of Rs 1,400 crore, has operations in 11 countries other than India, its home turf where it is the undisputed leader.
Asian Paints vice-president (international) Jalaj Dani said his company had received an approval from the Securities Industries Council (SIC) of Singapore for a ‘partial general offer’ to buy 50.1 per cent in Berger International.
A Malaysian businessman now owns Berger International, a company that originated in 1760 in the UK. Ariza Holdings, an investment firm, is the largest investor in Berger International with a 56.77 per cent stake. Asian Paints said Ariza had agreed to tender its shares in the open offer.
The offer aims to mop up 52 million shares — or 50.1 per cent of Berger International’s shares — at $ 0.40 apiece (Singapore dollar). Asian Paints will have to shell out $ 20.8 million, or Rs 57.6 crore, to shareholders who part with their shares. Asian Paints said Ariza had given it an “irrevocable undertaking” to participate fully in the offer.
Berger International straddles 11 nations, including China, south-east Asia, West Asia and the Caribbean Islands. With world-wide sales of $ 115 million (Rs 322 crore) in 2001, it is the largest paint maker in Bahrain, Jamaica, Malta, Barbados and Trinidad & Tobago, and a key player in protective coatings in Singapore and UAE — with manufacturing units in all countries.
In addition to its direct presence in 11 countries, Berger International holds 30 per cent stake in Dutch Boy Philippines Inc, a paints company in the Philippines. Of late, Berger Paints has also ventured into construction and maintenance businesses.
According to Dani, the acquisition is Asian Paints’ largest in overseas markets. Ashwin Dani, vice-chairman & managing director of Asian Paints, said: “In line with our vision of becoming a leading player in emerging markets, Berger International offers access to the high-growth emerging markets. Access to China and south-east Asia will open up more opportunities to tap the fastest-growing paint markets in the world.”
Asian Paints said the acquisition would be funded by the working capital available with the company and money borrowed at competitive rates.
Berger, Asian Paints officials said, is a strong brand in most countries, and has a capacity of 50,000 tonnes, spread across a dozen countries. Its strengths lie in protective, industrial and marine coatings. Asian Paints, they say, can now expand its product range in all these countries.