Nippon Paint Holdings, Japan’s largest manufacturer of paints and coatings, announced on Wednesday that it plans to acquire Australia’s DuluxGroup for 300 billion yen (A$3.86 billion).
Shares in DuluxGroup skyrocketed on the back of the development, closing yesterday at a 27.1 per cent premium to the previous day’s closing price.
There aren’t any expected changes to the DuluxGroup leadership, business portfolio, manufacturing or operations and the deal would essentially give Nippon Paint an entry into the Australia and New Zealand market.
“The board has carefully considered the strategic options available to DuluxGroup to maximise value, including continuing to pursue domestic and global growth as a standalone company, and we have unanimously concluded that the transaction with Nippon is in the best interests of our shareholders,” said Graeme Liebelt, Chairman of DuluxGroup.
DuluxGroup’s Australian and New Zealand operations sell Dulux paints and coatings, Selley’s and Parchem sealants, B&D Group garage doors and Lincoln Sentry hardware. Late last year, the group announced it had increased its full-year profit 5.4 per cent to A$150.7 million. Revenue was also up 3.3 per cent to A$1.84 billion, though it was slowing due to a mild downturn amongst building materials suppliers.
Nippon Paint Holdings has operations in Asia, the US and Europe. The group recorded sales of ¥623 billion (A$7.8 billion) and an operating profit of ¥66.2 billion (A$824 million) for the fiscal year ended December 31.
“Nippon intends to maintain the legacy developed by DuluxGroup and facilitate DuluxGroup’s existing vision by leveraging the resources of the broader Nippon platform,” said Tetsushi Tado, Representative Director and President of Nippon Paint Holdings.