Nippon Paint Holdings Co., Ltd. (TSE:4612) agreed to acquire DuluxGroup Limited (ASX:DLX) from Mirrabooka Investments Limited (ASX:MIR) from Mirrabooka Investments Limited (ASX:MIR) and others for AUD 3.9 billion on April 16, 2019. On April 17, 2019, a scheme implementation deed was entered. Nippon Paint Holdings Co., Ltd. will acquire 389.3 million shares at AUD 9.65 per share in cash. DuluxGroup Limited is planning to pay AUD 0.15 per share interim dividend for the fiscal year ending September 30, 2019 therefore DuluxGroup Limited's shareholders will receive AUD 9.8 per share in total as consideration under the scheme of arrangement. In addition, DuluxGroup Limited is planning to pay special dividends up to AUD 0.26 per share but if an interim dividend of more than AUD 0.15 per share or a special dividend is paid, such amount will be deducted from the acquisition price of AUD 9.8 payable by Nippon Paint Holdings Co., Ltd. to DuluxGroup Limited's shareholders. Nippon Paint Holdings Co., Ltd. may nominate any of its wholly-owned subsidiaries to acquire the DuluxGroup Limited shares under the scheme by giving written notice to DuluxGroup Limited on or before the date that is 5 business days before the first court date.

Nippon Paint Holdings Co., Ltd. expects to fund the cash consideration through a new committed debt acquisition facility and through internal cash reserves. Nippon Paint Holdings Co., Ltd has executed debt commitment letter and accompanying facility agreement from Sumitomo Mitsui Banking Corporation. On June 4, 2019, Nippon Paint Holdings entered into the term facility agreement with Sumitomo Mitsui Banking Corporation for raise ¥303.6 trillion (AUD 4 billion) to finance the acquisition. Nippon Paint Holdings Co., Ltd. may terminate this deed by notice in writing to DuluxGroup Limited at any time before 8 am on the second court date if any of the DuluxGroup Limited's Director publicly withdraws, changes or adversely modifies his or her recommendation that DuluxGroup Limited shareholders vote in favor of the resolution to approve the scheme or publicly recommends a competing proposal. DuluxGroup Limited may terminate the deed by notice in writing to Nippon Paint Holdings Co., Ltd. at any time before 8 am on the second court date if all or a majority of DuluxGroup Limited's Directors withdraw or change their recommendation when either a superior proposal is made or the independent expert concludes that the scheme is not or is no longer in the best interests of DuluxGroup Limited's shareholders. DuluxGroup Limited will run as a separate division and will retain the DuluxGroup name. The transaction involves the payment of termination fees of AUD 38.15 million by Nippon Paint Holdings Co., Ltd. to DuluxGroup Limited and by DuluxGroup Limited to Nippon Paint Holdings Co., Ltd.

No changes are expected to be made to DuluxGroup leadership, business portfolio, manufacturing and operations. The implementation of the scheme is subject to certain conditions including the approval of shareholders of DuluxGroup Limited (atleast 75%), approval of Supreme Court of Victoria, no prescribed occurrences, restraints, material adverse change or material breach of warranty by DuluxGroup Limited or Nippon Paint Holdings Co., Ltd., the approval of the Australian Foreign Investment Review Board and the New Zealand Overseas Investment Office. The scheme is not conditional on Nippon securing funds. The first court hearing and the second court hearing will be held in mid to late June 2019 and early August 2019 respectively. A meeting of shareholders of DuluxGroup will be held in late July 2019.

The Board of Directors of Nippon Paint Holdings Co., Ltd. passed a resolution for the transaction on April 16, 2019. The Board of Directors of DuluxGroup Limited unanimously approved the transaction on April 17, 2019. On May 6, 2019, Board of Directors of DuluxGroup Limited recommended the shareholders in favour this agreement. On June 7, 2019, Foreign Investment Review Board approved the transaction. The shareholders of DuluxGroup Limited do not need to take any action at the present time. As of June 14, 2019, the Federal Court of Australia approved the convening of a meeting of DuluxGroup's shareholders to consider and vote on the transaction. DuluxGroup Limited and Nippon Paint Holdings Co., Ltd. agree to establish an independent committee to act as a forum for discussion and planning. As of June 28, 2019, New Zealand Overseas Investment Office has approved the transaction. The scheme meeting of shareholders of DuluxGroup will take place on July 31, 2019. Scheme was approved by shareholders of DuluxGroup on July 31, 2019. As on August 6, 2019, the transaction has been approved by Federal Court of Australia. The scheme will become effective in early August 2019. The scheme is expected to be implemented in mid-August 2019. As of July 31, 2019, scheme is expected to be implemented on August 21, 2019. Macquarie Capital (Australia) Limited acted as the financial advisor and Neil Pathak, Alex Kauye, Josh Fisher, Matthew Ampt, Nick Madders, Sarah McArthur, Travis Cordingley, Simon Lynch, Muhunthan Kanagaratnam and Julian Lian of Gilbert + Tobin acted as legal advisors to DuluxGroup Limited. Nomura Holdings, Inc. (TSE:8604) acted as financial advisor to Nippon Paint in the transaction. Grant Samuel Group Limited acted as independent expert for the Directors of DuluxGroup. Grant Samuel Group Limited will be paid and advisory fee of AUD 0.52 million.