Nippon Paint Completes Acquisition of 100% Stake in Global Leading Enterprise AOC for RMB 16 Billion
On March 4, Nippon Paint Holdings (hereinafter referred to as "Nippon Paint") announced that it had completed the acquisition of 100% of the equity of American company LSF11 A5 TopCo LLC (AOC). The transaction was valued at USD 2.194 billion (approximately JPY 333.466 billion). AOC is a manufacturer of coatings, pigments, and composite materials. It is a leader in the North American market and holds a leading position in more specialized segments of the European market.
According to available information, AOC was established in August 2021 and is headquartered in Tennessee, USA. It is a global leader in CASE (Coatings, Adhesives, Sealants, and Elastomers) and pigment solutions, with its products widely used in construction, infrastructure, transportation, maritime, and other sectors. The company currently operates 14 production bases and 10 technical service centers worldwide, employing over 100 R&D and technical service personnel. Sales revenues for 2021–2023 were USD 1.483 billion, USD 1.775 billion, and USD 1.496 billion respectively, with net profits attributable to the parent company of USD 133 million, USD 236 million, and USD 131 million in the same years.
Public information reveals that in 2023, AOC’s CASE & pigment business accounted for 52% of the group’s total revenue—comprising 28% from coatings and protective agents, 18% from pigments, and 6% from adhesives and others—while its composite materials business made up the remaining 48%. Regionally, 71% of revenue came from North America, 21% from Europe, the Middle East, and Africa, and 9% from Asia.
It is reported that this acquisition will maximize shareholder value (MSV) for the Nippon Paint Group. First, AOC boasts an extensive customer base, advanced technological capabilities, and a flexible logistics network, securing leading positions in the US and European markets. Second, AOC exhibits excellent profitability and low capital expenditure requirements, resulting in robust cash generation. Third, by integrating into the group, AOC is expected to contribute to the sustainable compound growth of EPS and stimulate growth in existing businesses through collaboration with group companies. Fourth, the acquisition adds a new pillar to the group’s high-quality assets. Fifth, it will enhance the overall attractiveness of the Nippon Paint Group’s business and financial profile.
Nippon Paint’s medium- to long-term strategy is to advance its “Coatings+” approach by expanding into areas adjacent to coatings in search of new growth opportunities. The coatings-adjacent market is estimated to be about three times the size of the coatings market, promising significant growth for the company. “We are working to establish a solid foundation in each region to expand our market share,” the company stated. Following this strategy, Nippon Paint has successively acquired several companies in the coatings-adjacent field, including JUB, Betek Boya, NPT, Alina Group, and AOC.
According to the financial report, in 2024, Nippon Paint achieved consolidated sales of JPY 1,638.72 billion (approximately USD 10.7669 billion), reflecting a year-on-year increase of 13.6%. Net profit attributable to the parent company reached JPY 127.337 billion, a 7.5% increase year-on-year. Specifically, the coatings-adjacent business generated sales of JPY 175.113 billion in 2024, up by 10.08% year-on-year. The report further shows that sales revenue from Nippon Paint’s coatings-adjacent business grew from JPY 25.5 billion in 2019 to JPY 175.113 billion in 2024—an increase of 587% over six years.