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Investor Relations (IR)
2021.11.02

Notice of Additional Acquisition of Shares of Consolidated Subsidiaries to Make Them Wholly-Owned Subsidiaries

#Investor Relations #timely disclosure

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November 02, 2021
Company:Nippon Paint Holdings Co., Ltd. Representative:Yuichiro Wakatsuki
Representative Executive Officer & Co-President
Wee Siew Kim
Representative Executive Officer & Co-President
(Code No.: 4612; TSE 1st Section)
Contact:Ryosuke Tanaka,
 General Manager of Investor Relations
(TEL +81-50-3131-7419)

Notice of Additional Acquisition of Shares of
Consolidated Subsidiaries to Make Them Wholly-Owned Subsidiaries

Nippon Paint Holdings Co., Ltd. is announcing that its consolidated subsidiary, Nippon Paint Automotive Coatings Co., Ltd. (NPAC), entered into a share transfer agreement with Tong Yang Holding Corporation today for the additional acquisition of shares of five automotive coatings companies (the “Five Target Companies”), which are consolidated subsidiaries of NPAC, making them wholly-owned subsidiaries of NPAC.
The Board of Directors of NPHD decided during its meeting held on October 28, 2021 to entrust the decision-making on the signing of the Share Transfer Agreement to Wee Siew Kim, Representative Executive Officer and Co-President of NPHD. Since all conditions have been met, we have decided to formally conclude the Share Transfer Agreement on November 2, 2021.

1. Reason for the additional acquisition of shares

The Nippon Paint Group and NPAC are operating the automotive coatings business globally. We are ranked third in the world, offering one-stop capabilities ranging from coatings for automotive bodies, bumpers to plastic components. We are expanding operations in each operating region, with a focus particularly on the Chinese market, which has been growing rapidly in recent years.
We have decided to acquire additional shares of the Five Target Companies that are engaged in manufacturing and sale of coatings for automotive plastic components in China, making them wholly-owned subsidiaries of NPAC. Through this transaction, we will consolidate and integrate the automotive coatings business in China toward increasing our market share.

(Reference: List of companies that will be converted into wholly owned subsidiaries through the share acquisition)

Company
Country
Ownership ratio of NPHD at present
(post acquisition ownership ratio)
Company
NANJING NBC CO., LTD.
Country
Nanjing, China
Ownership ratio of NPHD at present
(post acquisition ownership ratio)
60% (100%)
Company
GUANGZHOU NBC CO., LTD.
Country
Guangzhou, China
Ownership ratio of NPHD at present
(post acquisition ownership ratio)
60% (100%)
Company
CHANGCHUN NBC CO., LTD.
Country
Changchun, China
Ownership ratio of NPHD at present
(post acquisition ownership ratio)
60% (100%)
Company
TIANJIN NBC CO., LTD.
Country
Tianjin, China
Ownership ratio of NPHD at present
(post acquisition ownership ratio)
60% (100%)
Company
WUHAN NBC CO., LTD.
Country
Wuhan, China
Ownership ratio of NPHD at present
(post acquisition ownership ratio)
60% (100%)

2. Overview of NPHD’s subsidiary acquiring shares

(1) NameNippon Paint Automotive Coatings Co., Ltd.
(2) Address2-14-1 Shodai Otani, Hirakata-City, Osaka
(3) Names and positions of representativesPresident and Representative Director of the Board
Shinji Takedagawa
(4) Description of businessManufacturing and sale of automotive coatings
(5) Stated capital360 million yen

3. Overview of the wholly-owned subsidiaries

(1) NANJING NBC CO., LTD.

(1) NameNANJING NBC CO., LTD.
(2) Address177 Puqiao Road, Nanjing Chemical Industry Park, Nanjing, Jiangsu Province, P.R.China
(3) Names and positions of representativesAkihiro Tsukuda / Chairman
(4) Description of businessManufacturing and sale of coatings for automotive plastic components
(5) Stated capital24,202,488 RMB (JPY 410 million)
(6) Major shareholders and ownership ratioNippon Paint Automotive Coatings Co., Ltd.: 60%
Tong Yang Holding Corporation: 40%

(2) GUANGZHOU NBC CO., LTD.

(1) NameGUANGZHOU NBC CO., LTD.
(2) AddressNo.9, Huangge Yiheng Road, Huangge Town, Nansha District, Guangzhou, P.R.China
(3) Names and positions of representativesAkihiro Tsukuda / Chairman
(4) Description of businessManufacturing and sale of coatings for automotive plastic components
(5) Stated capital42,527,094 RMB (JPY 710 million)
(6) Major shareholders and ownership ratioNippon Paint Automotive Coatings Co., Ltd.: 60%
Tong Yang Holding Corporation: 40%

(3) CHANGCHUN NBC CO., LTD.

(1) NameCHANGCHUN NBC CO., LTD.
(2) AddressRoom516, No.1468, Xiantai Street, Economic & Technical Development Zone, Changchun, P.R.China
(3) Names and positions of representativesAkihiro Tsukuda / Chairman
(4) Description of businessManufacturing and sale of coatings for automotive plastic components
(5) Stated capital12,000,000 RMB (JPY 200 million)
(6) Major shareholders and ownership ratioNippon Paint Automotive Coatings Co., Ltd.: 60%
Tong Yang Holding Corporation: 40%

(4) TIANJIN NBC CO., LTD.

(1) NameTIANJIN NBC CO., LTD.
(2) AddressNo.2 Taixing Road, Xinkou Industrial Park, Xiqing Economic Development Area, Tianjin, P.R.China
(3) Names and positions of representativesAkihiro Tsukuda / Chairman
(4) Description of businessManufacturing and sale of coatings for automotive plastic components
(5) Stated capital35,289,160 RMB (JPY 590 million)
(6) Major shareholders and ownership ratioNippon Paint Automotive Coatings Co., Ltd.: 60%
Tong Yang Holding Corporation: 40%

(5) WUHAN NBC CO., LTD.

(1) NameWUHAN NBC CO., LTD.
(2) AddressNo.18, XiBeiHu Third Road, ZhuShanHu Avenue, WuHan Economic Technical Development Zone, P.R.China
(3) Names and positions of representativesAkihiro Tsukuda / Chairman
(4) Description of businessManufacturing and sale of coatings for automotive plastic components
(5) Stated capital12,411,857 RMB (JPY 210 million)
(6) Major shareholders and ownership ratioNippon Paint Automotive Coatings Co., Ltd.: 60%
Tong Yang Holding Corporation: 40%

4. Overview of the seller of the shares

(1) NameTong Yang Holding Corporation
(2) AddressP.O.Box 31119 Grand Pavilion ,Hibiscus Way,802 West Bay Road, Grand Cayman,KY1-1205 Cayman Islands
(3) Names and positions of representativesWU,YEONG-MAW (Also known as RAYMOND WU)
(4) Description of businessInvestment Holdings Ltd.
(5) Stated capital75,466,906 USD (JPY 8,226mn)
(6) Date of establishment12 August 2003
(7) Major shareholders and ownership ratioTONG YANG INDUSTRY CO., LTD: 100%
(8) Relationship with the listed companyCapital relationshipThere are no capital relationships to be stated.
Personnel relationshipThere are no personal relationships to be stated.
Transactional relationshipSells coatings for automotive parts and components through Nippon Paint Automotive Coatings
(9) Management results and financial situation over the last three yearsFiscal year endedFiscal Year Ended December 31, 2018Fiscal Year Ended December 31, 2019Fiscal Year Ended December 31, 2020
Total equity193,207,689 USD
(JPY 21,060mn)
186,329,295 USD
(JPY 20,310mn)
189,264,517 USD
(JPY 20,630mn)
Total assets341,729,716 USD
(JPY 37,249mn)
343,395,246 USD
(JPY 37,430mn)
348,222,545 USD
(JPY 37,956mn)
Net sales191,636,736 USD
(JPY 20,888mn)
115,886,917 USD
(JPY 12,632mn)
103,428,809 USD
(JPY 11,274mn)
Operating profit-5,339,221 USD
(JPY -582mn)
-15,419,231 USD
(JPY -1,681mn)
-15,738,220 USD
(JPY -1,715mn)
Profit before tax7,612,976 USD
(JPY 830mn)
-7,591,324 USD
(JPY -827mn)
-7,033,081 USD
(JPY -767mn)
Profit7,116,796 USD
(JPY 776mn)
-7,704,859 USD
(JPY -840mn)
-6,947,876 USD
(JPY -757mn)
Dividends per share0.015 USD
(JPY 1.6)
0.015 USD
(JPY 1.6)
0.066 USD
(JPY 7.2)

5. Acquisition Considerations

The total acquisition price of the Five Target Companies is JPY 5.9 billion.

6. Schedule

(1) Date of resolutionNovember 2, 2021
(2) Date of execution of the AgreementNovember 2, 2021
(3) Closing date of the Share TransferScheduled for 1Q FY2022

7. Future Outlook

The Five Target Companies have been our consolidated subsidiaries. As a result, the impact of the transaction on our consolidated earnings for the fiscal year ending December 31, 2021 will be insignificant.


※The exchange rates used to prepare this document are RMB 1.0 = JPY 16.8 and USD 1.0 = JPY 109.0, which are the same exchange rates used to calculate the revision of the consolidated earnings forecast for the fiscal year ending December 31, 2021 released on October 12, 2021.



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