In a recent development, Asian Paints, a leading paint manufacturer in India, has acquired an additional stake in White Teak, resulting in a fall in the company’s share price during early morning trade on Monday. The acquisition involved the purchase of an 11% equity share capital of White Teak from its promoters for approximately Rs 54 crore.
This latest acquisition follows Asian Paints’ previous investment in April 2022 when the company acquired 49% of the equity share capital of Obgenix Software Private Limited, a subsidiary of White Teak, for a consideration of around Rs 180 crore. With the recent transaction, Asian Paints now holds a majority stake of 60% (equivalent to 2,40,600 equity shares with a face value of Rs 10 each) in White Teak.
As part of the deal, Asian Paints has also agreed to provide an earn-out of approximately Rs 59.5 crore to the promoters of White Teak based on the achievement of mutually agreed financial targets. White Teak specializes in designing, trading, and dealing in various decorative lighting products and fans.
The remaining 40% of the equity share capital of White Teak is expected to be acquired by Asian Paints during the financial years 2025-2026, with a maximum consideration of Rs 360 crore.
As of 9:37 am, Asian Paints’ shares were trading at Rs 3,294.00, reflecting a decline of Rs 3.70 or 0.11% on the Bombay Stock Exchange (BSE). The stock had reached a 52-week high of Rs 3,590 and a 52-week low of Rs 2,677.65 on September 28, 2022, and June 29, 2022, respectively. Currently, it is trading approximately 8.25% below its 52-week high and 23.02% above its 52-week low.
The acquisition of an additional stake in White Teak further strengthens Asian Paints’ position in the decorative lighting products and fans market, showcasing the company’s strategic expansion efforts. Investors and industry analysts will closely monitor the impact of this acquisition on Asian Paints’ business operations and future growth prospects.
Sources BY Agencies