Nippon Paint Holdings Co. said Friday that Singapore's Wuthelam Holdings Group will take a majority stake in it, in a 1.29 trillion yen ($12 billion) deal, as they look to deepen their decades-long partnership to meet growing demand in Asian markets.

Wuthelam, Nippon Paint's top shareholder, will raise its stake to 58.7 percent from the current 39.6 percent via a third-party share allotment to be completed on Jan. 1 next year.

Nippon Paint, the world's fourth-largest paint maker by sales and headquartered in Osaka Prefecture, has been working with paint manufacturer Wuthelam since the 1960s in Asian markets, particularly in Southeast Asia.

In a rare acquisition of a Japanese firm by a company in another Asian country, Nippon Paint will come under the wing of Wuthelam to bolster their Asian operations and better compete against U.S. and European rivals, as paint demand is growing for infrastructure such as bridges and roads and autos.

The latest deal follows Sharp Corp., a household name in Japan, being brought under the group of Taiwan's Hon Hai Precision Industry Co. in 2016.

Under their operation reforms, Nippon Paint, which has strength in paints for industrial and auto use, will take full control of Wuthelam's Indonesian business as well as their joint ventures in China, South Korea, Taiwan, Malaysia and Singapore.

"The purpose (of the deal) is not for Wuthelam to acquire Nippon Paint," Nippon Paint CEO Masaaki Tanaka said during an online briefing. Rather, the deal was designed to help the Japanese paint maker raise funds for future growth, he said.

Wuthelam will no longer directly engage in the paint business, letting Nippon Paint oversee the operations.

In 2013, Wuthelam sought to strengthen its tie-up with Nippon Paint by raising its stake to around 45 percent but later gave up on the bid after the plan was rejected by the Japanese company.

To gain a stronger foothold overseas, Nippon Paint acquired Australian peer DuluxGroup Ltd. and Turkey's Betek Boya ve Kimya Sanayi Anonim Sirketi A.S. in 2019.

Nippon Paint reported a 36.72 billion yen net profit in 2019 on sales of 692 billion yen.

==Kyodo

© Kyodo News International, Inc., source Newswire