Under the terms of the agreement, Nippon Paint will issue new shares worth 1.18 trillion Yen to Singapore’s Wuthelam Holdings, using the funds as well as 1 billion Yen in cash to take full ownership of joint ventures in China, India, Malaysia, Singapore, South Korea and Thailand. In addition, it will buy Wuthelam’s business in Indonesia for $2 billion.

Nippon Paint’s links with Wuthelam go back to 1962 when the Japanese paintmaker appointed the group as its Asian sales agent, first establishing a joint venture in Singapore and then in other countries as it expanded across Asia.

Masaaki Tanaka, Nippon Paint’s chairman, president & CEO, said the agreement will bring the companies’ 60-year-long partnership to perfection, strengthening Nippon Paint’s balance sheet and building a strong foundation for accelerated growth.

Under a new management structure adopted this year, the Tokyo-headquartered paint group said it is also working toward maximizing shareholder value through mergers and acquisitions along with enhancing global governance. 

Nippon Paint said Asia is becoming a key region for expansion, both in terms of market size and growth rate due to its projected demographic and economic growth leading to increasing demand. This, it said, was the reason why it wanted to buy approximately 100% ownership in the Asian JVs.

The company added that by bringing on board the Indonesia business, which boasts a large share of the construction paints sector – one that shows particular growth due to its link with population and per-capita GDP growth – it will establish a dominant position in the Asian market.

In 2019, Nippon Paint paid $2.6 billion for DuluxGroup, Australia and New Zealand’s leading paint manufacturer, a move regarded as an important step in its global growth ambitions.

Author: Elaine Burridge, Freelance Journalist