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Nippon Paint pours into Australia's DuluxGroup with US$2.7b offer

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[SYDNEY] Japan's Nippon Paint Holdings Co Ltd has proposed buying Australia's biggest paint maker DuluxGroup Ltd for A$3.8 billion (S$3.7 billion), expanding its global footprint through entering Australia just as a housing boom there falters. Read more at The Business Times.

The proposal comes after Nippon Paint has scoured the globe for big deals to buy growth away from its stagnant home market.

Dulux stock jumped to the offer price of A$9.80, while the broader Australian market fell 0.2 per cent by midsession. Nippon Paint shares fell 3.5 per cent in Tokyo.Driven by population growth and rising home values, a long building boom stoked demand for Dulux's paints, garage doors and garden supplies in Australia, doubling its share price in six years as its revenue climbed.

Nippon Paint chief executive Tetsushi Tado in a statement issued by Dulux said the Australian company would be run as a separate division and he expected no change to its leadership, manufacturing or operations if the deal proceeded.Nippon Paint's move comes amid a surge in outbound Japanese deals, driven by a mature and shrinking domestic market with Australia a favourite destination.

Nippon Paint's proposed buyout would be the biggest from a Japanese entity since Japan Post Holding Co Ltd's ultimately disastrous purchase of Australian logistics firm Toll Holdings for A$6.5 billion in 2015.

 

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