Nippon Paint shares surge the most in 24 years following US$2.3 billion deal

Nippon Paint shares rose after announcing a deal to acquire a US chemical formulator.

The Japanese firm’s share price rose 23.6 percent on Tuesday (October 29), the highest since February 2000. The company said Monday it will acquire Tennessee-based AOC from the Lone Star Fund for US$2.3 billion.

“We view this news positively given the strong EPS contribution and strong profitability,” SMBC Nikko Securities analysts Yasuhiro Shintani and Go Miyamoto wrote in a note on Monday. “We believe this transaction will contribute to regional diversification as well as earnings per share growth.”

In recent years, Nippon Paint has been expanding its business through mergers and acquisitions. The firm acquired Australian company DuluxGroup back in 2019, and also bought European Cromology Holding and its subsidiaries in 2021. BLOOMBERG