Shares of Nippon Paint Holdings (T: 4612) gained more than 6.5% on Friday after accepting an offer worth 1.29 trillion yen ($12.18 billion) from Goh Cheng Liang’s Wutelham. The aim of the deal is to seek “more ambitious moves” to increase and deliver shareholder returns, companies said in a statement.
Wutelham Holdings will, therefore, see its stake rise to around 60% from 39%. On the other hand, Nippon Paint will use the funds to buy out their joint ventures in Southeast Asia.
The new deal is a culmination of the 50-year long partnership between two companies. Goh’s son, Hup Jin, became the CEO of Nippon Paint two years ago.
“The many applications of paint include residential and commercial construction, transport applications such as cars and trains, and infrastructures such as bridges and roads, meaning that demand for paint grows in step with population growth and urbanization,” Nippon Paint said.
Goh Cheng Liang and Nippon Paint decided to merge their companies and seek “more ambitious moves” to increase and deliver shareholder returns, they stated.
Nippon Paint share price jumped more than 6.5% on Friday following the deal announcement. The price action previously gapped lower at the open before rallying to print a new all-time high at 8700.