Nippon Paint Holdings Co., Ltd. (NPHD) has decided that DuluxGroup Limited (DuluxGroup), its consolidated subsidiary, will acquire shares of DP JUB delniška družba pooblaščenka d.d. (JUB) and JUB’s subsidiaries, etc. to make them indirectly owned subsidiaries of NPHD. JUB manufactures and sells decorative paints, External Thermal Insulation Composite Systems (ETICS) and other paint-related products in Central and Eastern Europe. DuluxGroup has entered into a conditional share sale and purchase agreement.

 

The Nippon Paint Group is pursuing Maximization of Shareholder Value as its ultimate objective. Toward achieving this goal, our New Medium-Term Plan has set targets to achieve revenue growth that outpaces the market’s growth in our operating regions by promoting growth strategies in our operating regions and businesses based on Powerful Partnerships among our Group companies. In addition, we are aggressively pursuing M&A activities by leveraging the high growth potential and stable cash flows of the paint market to entrench sustainable growth and further increase market presence around the world.

 

The European paint market is the world’s second largest following the China market and has prospects for continuing steady growth. JUB is a manufacturer of decorative paints, ETICS and other paint-related products, with a market presence and an extensive distribution network in Central Europe centered on Slovenia, Serbia, Croatia, and Bosnia and Herzegovina. JUB is one of the market leaders in interior paints in Slovenia, Croatia, and Bosnia and Herzegovina and in façade paints in Slovenia, Serbia, and Bosnia and Herzegovina, commanding a market leading position.

 

The Acquisition will allow JUB to better use its extensive distribution network and recognized brands in Central Europe under the Nippon Paint Group to create synergies with DuluxGroup and other Group companies. By taking these actions, the Nippon Paint Group will aim to build a bridgehead for the decorative paints, ETICS and the paint related businesses in the Central and Eastern European markets.

 

The Acquisition is expected to contribute to be EPS accretive from the first year of acquisition. The shares of JUB will be acquired by DGL International (UK) Ltd, a company newly established in the U.K. by DuluxGroup, using funds provided by NPHD through borrowings from financial institutions. NPHD is not proposing to raise equity funding.