Nippon Paint in $12 billion deal to buy Wuthelam assets

Nippon Paint can is seen in this illustration photo

Nippon Paint Holdings Co Ltd on Friday said it will sell 1.185 trillion yen ($11.2 billion) worth of shares to Singapore’s Wuthelam Group, whose stake in the Japanese company will then rise to just under 60% from 39%.

Nippon Paint said it will use the funds raised as well as 100 billion yen in cash to buy out Wuthelam from their Asian joint ventures in countries including China, Malaysia and Thailand, as well as acquire Wuthelam’s wholly owned business in Indonesia, in a 1.285 trillion yen deal.

“Asia is becoming a key region for the Company’s sustainable growth in terms of both market size and growth rate due to its projected demographic and economic growth leading to increasing demand,” Nippon Paint said in a statement.

The firm noted growing demand for paint in applications including residential and commercial construction, and infrastructure such as bridges and roads.

It said it expects the deal to be finalised in January, and that it will need to be cleared by regulators in each of the markets where the businesses operate.

Nippon Paint was advised by Nomura and Wuthelam worked with Bank of America.

Shares of Nippon Paint closed up 6.5% after the announcement in a near-flat broader market.

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