Haymes set to be largest locally owned paint maker
Haymes Paints will soon be the biggest locally owned paint maker in Australia, as new rival Japanese giant, Nippon Paint, becomes the owner of market leader Dulux.
The news comes after Dulux shareholders approved a $3.8 billion buyout by Nippon Paints, with 97.6 per cent of all shares voted in favour of the deal at a meeting in Melbourne on Wednesday July 31, according to an Australian Financial Review.
Dulux will suspend from trading on the Australian Securities Exchange on August 6, if court approval is granted under the buyout timetable, after nine years as a stand-alone company on the ASX.
After being associated with the company for 30 years, Dulux Chairman, Graeme Liebelt, said it was a little bit of a sad day, after 97.6 per cent of Dulux shares were voted in favour of the Nippon Pains buyout, according to the Australian Financial review.
The board had negotiated hard before the proposed deal was jointly announced on April 17, in what was described as a “compelling price”.
“What we ended up with was a very strong multiple,” Mr Liebelt said after the meeting.
Grant Samuel put an underlying value of between $8.53 and $9.93 on Dulux shares in an independent expert’s report that shareholders considered ahead of the meeting, according the Australian Financial Review. Dulux shareholders will receive $9.37 in cash, having already received dividends that bumped the total value up to $9.80 in a $3.8 billion bid. The total enterprise value of the bid was $4.2 billion.
Nippon Paints operates in 26 countries and has a global workforce of 20,400 employees, with Bunnings being the major stockist for Dulux paints.
Now with a market share of seven per cent in Australia compared with Dulux 47 per cent share, Haymes Paint recently announced it would now aggressively promote its Australian-owned status.
Director, Tim Haymes said Haymes Paint would be emphasising its roots stretching back to 1935 and that it still was Australian-owned.
“It is something that we’ll be promoting to the hilt,” he said.
Mr Haymes said the housing downturn had meant growth was more subdued across the paint industry, but there were still growth areas in infrastructure, including aged care homes.
“There has been a little bit of a slowdown in the last 12 months,” he said.
In the Australian Financial review report, Mr Haymes said consumers remained very value conscious, and provided the quality and pricing of the product was right, they would then look more closely at the ownership origins.
The company makes about 12 million litres of paint annually from a large factory at Ballarat in Victoria, manned by 240 people.