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November 13, 2023
Company:Nippon Paint Holdings Co., Ltd. Representative:Yuichiro Wakatsuki
Director, Representative Executive Officer & Co-President
Wee Siew Kim
Director, Representative Executive Officer & Co-President
(Code: 4612; TSE Prime) Contact:Ryosuke Tanaka
Executive General Manager
Investor Relations, Sustainability and Public Relations
(TEL +81-50-3131-7419)

Notice Regarding Acquisition of Shares of Kazakhstani Paint and Adjacencies Product Manufacturer Alina Group LLP by Our Subsidiary

Nippon Paint Holdings Co., Ltd. (“NPHD”) is announcing that we have decided to acquire 75 percent of the share capital of Alina Group LLP (“Alina”), a Kazakhstan-based manufacturer and seller of dry-mix mortars, paint and coatings, etc., through our consolidated subsidiary Nippon Paint Holdings SG Pte. Ltd. (“NPHDSG”) (the “Acquisition”). We have entered into a share purchase agreement (the “Share Purchase Agreement”).

Concurrently with the signing of the Share Purchase Agreement, we have entered into a put and call option agreement that entitles NPHDSG to purchase the remaining 25% of the share capital of Alina in three years, or earlier upon agreement with the seller.

The Board of Directors of NPHD decided during its meeting held on August 10, 2023, to entrust the decision-making on the signing of the Share Purchase Agreement to the Representative Executive Officers & Co-Presidents. Since all conditions have been met, we have decided to formerly conclude the Share Purchase Agreement on November 11, 2023.

1. Reasons for the acquisition of shares

In our quest for Maximization of Shareholder Value (MSV) as its sole mission, Nippon Paint Group executes good and low-risk M&As through our Asset Assembler model for pursuing MSV, thereby boosting our performance and building up newly acquired brands and human resources, which can be further leveraged within the Group. Moreover, we are promoting the strategy of expanding our business areas, going beyond the paint and coatings area, to the adjacencies area over the medium to long term. In construction chemicals (CC), an adjacencies market segment with a global market estimated at USD72 billion^*1, we are building a solid foothold in each region in order to increase market share.

Central Asia including Kazakhstan has the potential for sustained strong growth driven by GDP growth and urbanization. Alina operates in four countries in Central Asia, centered on Kazakhstan, and has the leading position in the dry-mix mortar market, which is the CC market segment in Kazakhstan, as well as the paint and coatings market, with brands enjoying high visibility, well-established production bases, and extensive distribution networks.

The share acquisition will allow Nippon Paint Group to leverage the expertise accumulated by Alina. In addition, we will aim at expanding our business in the adjacencies area and increasing our market share in the Central Asia market by creating synergies with our Group companies, such as supplying in the Kazakhstan market the brands with wide-ranging price points offered by our Turkish consolidated subsidiary Betek Boya to enhance product offerings.

The Acquisition is expected to contribute to EPS accretion from the very first year. The Acquisition will be entirely funded through borrowings from financial institutions. NPHD is not proposing to raise equity funding.

*1 Source: ReportLinker

2. Overview of NPHDSG

(1) Name	Nippon Paint Holdings SG Pte. Ltd.
(2) Address	16 Raffles Quay, #17-03 Hong Leong Building, Singapore 048581
(3) Names and positions of representatives	Wee Siew Kim, Director
(4) Description of business	An investment holding company
(5) Share capital	SGD4 million (JPY376 million)
(6) Date of establishment	June 1, 1991
(7) Major shareholders and ownership ratio	NPHD : 100%

3. Overview of Alina Group LLP

4. Overview of the counterparties in the share acquisition

(1) Name	BALFANBAYEV YERLIK KURMAN-ALIEVICH
(2) Relationship with the listed company	Representative of the company subject to share acquisition

5. Number of shares to be acquired, and status of shareholdings before and after the share acquisition

(1) Shareholding ratio before the change	0%
(2) Share capital to be acquired	75%
(3) Shareholding ratio after the change	75%

Note: The acquisition price will not be disclosed due to confidentiality agreement with the Seller. The acquisition price was determined based on an arms-length negotiation, an internal valuation methodology consistent with general market practice, and by reference to relevant market transaction multiples, and the Board is satisfied that the price is fair and reasonable.

6. Schedule

(1) Date of decision-making	November 11, 2023
(2) Date of execution of the Share Purchase Agreements	November 11, 2023
(3) Closing date	FY2024 1H (scheduled) The acquisition is subject to the approval by regulatory authorities.

7. Future outlook

The impact of the Acquisition on our consolidated earnings for FY2023 is expected to be negligible.

Note: The exchange rate used to prepare this document is USD/JPY = 136.5, KZT/JPY = 0.31.

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Links to Related Pages

• M&A Information

• Our Business Model: Asset Assembler

• M&A Strategy

• Finance Strategy