November 22, 2024 – Nippon Paint Holdings Completes Repurchase of Indian Subsidiaries
Nippon Paint Holdings Co., Ltd. (hereinafter referred to as Nippon Holdings) has officially announced the completion of the repurchase of shares in two significant Indian paint manufacturing companies, reintegrating them into its fold as subsidiaries. The transaction was finalized on November 16, 2024.
The repurchased shares belonged to Nippon Paint (India) Private Limited (Nippon India) and Berger Nippon Paint Automotive Coatings Private Limited (Berger Nippon Automotive). Nippon India, which focuses on architectural, industrial, and automotive refinish coatings in India, has become a wholly-owned subsidiary of Nippon Holdings after the repurchase. Meanwhile, Berger Nippon Automotive, specializing in the Indian automotive coatings market, now has Nippon Holdings as its 51% shareholder, maintaining its status as a joint venture, with the remaining 49% owned by Berger Paints India Limited, a renowned Indian paint company.
According to AsiaMB, these two companies were originally subsidiaries of Nippon Holdings. However, in August 2021, as part of a strategic adjustment and medium to long-term value enhancement plan, Nippon Holdings transferred its shares in these two companies, along with a subsidiary responsible for European automotive coatings, to Isaac Newton Corporation (INC), a private enterprise in the British Virgin Islands. This transfer was a temporary equity custody arrangement, with Nippon Holdings retaining the right to repurchase. Notably, INC is under the control of the Goh family’s Wuthelam Group, which has deep ties with Nippon Holdings.
During the equity transfer period, to mitigate risks and maintain business continuity, Nippon Holdings entered into a series of agreements with INC. Despite the change in equity, the names, management teams, and operational affairs of the two companies remained unchanged. Nippon Holdings continued to provide comprehensive support and closely monitored their financial status.
In August 2023, the board of Nippon Holdings decided to repurchase the shares of Nippon India and Berger Nippon Automotive. After a series of negotiations and preparations, 99.99% of Nippon India’s shares (with the remaining 0.01% acquired by a subsidiary of Nippon Holdings due to local Indian legal restrictions) returned to Nippon Holdings at a price of JPY 12.18 billion. The 51% stake in Berger Nippon Automotive was acquired by Nippon Holdings’ automotive coatings subsidiary for JPY 2.29 billion. Based on current exchange rates, the total value of these two transactions is less than USD 100 million, significantly lower than the combined total assets of the two Indian companies at the end of 2022, which were approximately USD 180 million.
It is worth noting that although Nippon Holdings initially planned to complete the acquisitions in the first half of this year, there was a several-month delay in the actual operations. Regarding the repurchase plan for its European subsidiary, Nippon Holdings stated that it would seek an appropriate opportunity separately.