Allow me to commence by providing a concise overview of this transaction.
Today, our Board approved the buyback of the two India businesses, which were divested in August 2021 to the Wuthelam Group. However, it's important to note that the European automotive business is not included in the scope of this current buyback. In particular, we have successfully negotiated an arrangement to acquire 100% of NPI's shares. NPI is actively involved in various sectors including decorative paints, industrial coatings, and auto refinish businesses. Additionally, we've secured 51% of BNPA's shares, a 51:49 joint venture with Berger Paints India Limited (Berger). It's important to note that the European automotive business will remain under the umbrella of the Wuthelam Group and will not be part of the current buyback initiative.
Reflecting on the year 2021 when the decision for divestiture was made, it's evident that the India market confronted a challenging operating environment marked by external factors. These factors included fierce competition, the effects of the pandemic, rising raw material prices, and the emergence of new market entrants. During that period, NPI was operating at approximately breakeven, while BNPA was consistently incurring losses. Given this scenario, we recognized it imperative for both of these Indian businesses to undertake substantial business restructuring and reinforcement measures. Simultaneously, we aimed to retain the flexibility to capitalize on prospects within India's expanding market landscape. Consequently, we decided to divest these Indian enterprises to the Wuthelam Group, while also incorporating a call option to potentially buy back these businesses at a later date.
While NPHD continued to provide administrative and management support services to these companies, the two India businesses have successfully undergone measures, such as drastic management structural reforms and strategic promotion activities. The choice to buy back these businesses is grounded in our assessment that they currently hold promising potential for consistent and profitable growth following a period of losses. These two enterprises have notably captured substantial market share in the two southern states of India, which are central to their decorative business focus. Furthermore, they are now operating with positive profits. Bolstered by their robust brand recognition, the two businesses present considerable avenues for further growth.
Similar to the transaction that was executed two years ago, we have obtained an evaluation report from an independent third party, alongside a report from the special committee formed to scrutinize the transaction. Taking these reports into account, we reached an agreement with the Wuthelam Group on prices that align with the principle of Maximization of Shareholder Value (MSV), and today, the Board has granted approval for the transaction. This transaction is expected to be concluded in the first half of FY2024, accounting for the time necessary to secure approval from Indian authorities. Furthermore, it is projected to contribute to EPS from the first year.
Nippon Paint Holdings Co. Ltd. published this content on 31 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 August 2023 08:17:05 UTC.
Nippon Paint Holdings Co Ltd is a company mainly engaged in the manufacture and sale of coating materials and fine chemicals products. The Company is involved in the manufacture and sale of paint for automobile-, general- and industrial-uses, as well as fine chemicals. The Company operates in four business segments. The Japan segment conducts paint for automobile-, general- and industrial-uses, as well as fine chemicals business. The Asia segment conducts paint for automobile-, general- and industrial-uses, as well as fine chemicals business in China Singapore, Malaysia, Thailand, Korea, Southeast Asian countries, India. The Oceania segment conducts paint business, such as paint for general-, industrial-uses, and paints peripheral businesses. The Americas segment conducts paint for automobile business and contruction coating materials business.
NIPPON PAINT HOLDINGS CO., LTD. 
