“The structure change is much anticipated and it was faster than my expectation,” Chan said. Because Nippon Paint has more control over Nipsea, minority shareholder interests should be protected even though Wuthelam will become a controlling shareholder of the Japanese paint maker, he added.
Southeast AsiaGoh’s stake in Nippon Paint via Wuthelam will eventually reach 58.7 per cent when the transaction closes in January according to Nomura Holdings Inc., Nippon Paint’s sole financial adviser in the transaction. Nippon Paint will remain a listed company, Chief Executive Officer Masaaki Tanaka said at a news conference.
The shares of Nippon Paint climbed 6.5 per cent by the close in Tokyo. The stock is up 51 per cent this year. The Nikkei newspaper first reported the news earlier, sparking the share rally.Goh and Nippon Paint decided to unify their Asian businesses to seek “more ambitious moves” to grow and deliver shareholder returns, they said in the statement.
“The many applications of paint include residential and commercial construction, transport applications such as cars and trains, and infrastructure such as bridges and roads, meaning that demand for paint grows in step with population growth and urbanization,” Nippon Paint said, adding that these trends are strongest in Asia and are likely to deliver greater sales growth.
Most of the money from the deal will be kept within the broader organization, and Tanaka said that mergers and acquisitions will be accelerated. Last year, Nippon paint bought Australia’s Dulux Group for A$4 billion ($2.9 billion) and Turkey’s Betek Boya ve Kimya Sanayi AS.
are getting stronger and narrowing the competition gap with Japanese businesses,” said Mitsushige Akino, senior executive officer at Ichiyoshi Asset Management Co. “There could be more consolidation in the basic materials space. Looking at it in terms of auto production, spreading into Asian countries makes sense.”
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.