Calcutta, May 28: Snowcem today said in a despatch to the stock exchanges that it was not selling off its paints business to Berger Paints.
In October last year, Berger had reached an agreement with Snowcem to conduct a “financial due diligence” — or a threadbare examination — of the latter’s paints business.
Berger said Snowcem’s merchant banker today indicated that the deal had been called off. Berger has so far maintained that the two companies were still in talks, denying speculations of the deal falling through.
Snowcem said it had not received any response from Berger after the due diligence exercise was conducted, and hence was not interested in continuing with the negotiations.
Sources in the industry say Berger and Snowcem could not agree on price. PricewaterhouseCoopers had conducted the due diligence exercise for Berger.
Berger officials had said in October that PricewaterhouseCoopers would submit its report within a month-and-a-half, and the deal, had there been agreement on all key issues, would have gone through by January.
Industry observers felt Berger might have to shell out as much as Rs 100 crore for Snowcem’s paints business but the two companies maintained complete silence on price.
Snowcem is the leader in cement-based paints with a 26 per cent share of the market in India. Berger is the country’s second largest decorative paints company, and the leader in automotive paints. It secured the top position in the segment by acquiring the automotive paints business of ICI. Berger, too, is a key player in the cement-based paints business. Had the deal to acquire Snowcem’s paints business materialised, it would have obtained a virtual stranglehold on the market.