Singapore Billionaire Gets Windfall as Dream Deal Comes True

(Bloomberg) -- Almost a decade ago, the son of Singapore pigment mogul Goh Cheng Liang set his sights on gaining control of Japan's biggest paint maker. He finally succeeded, and that's been a boon for the family's wealth.

Their Wuthelam Holdings Pte. took a majority stake in Nippon Paint Holdings Co. in a $12 billion deal that was completed last month, according to filings this week. That's boosted their fortune to $24 billion from about $16 billion before the alliance was announced, according to the Bloomberg Billionaires Index.

For years, Wuthelam and Nippon Paint operated a business with joint ventures in countries including China, India and Malaysia. In August, Nippon Paint struck an agreement that allowed them to buy out the joint venture and take over Wuthelam's wholly owned Indonesia business. In turn, the Gohs' increased their stake in Nippon Paint to about 58%.

“The growth will continue,” said Bloomberg Intelligence analyst Horace Chan, who estimates the alliance could lift Nippon Paint's net income by about 64% this year. “It will help the company in terms of simplifying the corporate structure, which will allow more efficient allocation of resources.”

British Surplus

Goh, 93, got his start in the paint business in 1949, when the British army auctioned off surplus war materials. He bought barrels of old paint and mixed colors, later selling them under his own brand name, Pigeon.

His partnership with Nippon Paint began in the 1950s, when he set up his first shop in Singapore and became the main local distributor for the Japanese company. In 1962, they established a joint venture in the city-state that they named the Nippon Paint South-East Asia Group, or Nipsea. Goh's son, who has led the company since the 1980s, began exploring a takeover of Nippon Paint in 2012, though the talks stalled and instead resulted in a deeper strategic alliance in 2014.

When the deal finally happened, it led to a stock rally, with shares of the Japanese paint maker surging to a peak in November. That month, the company reported a 14% increase in revenue for the three quarters through September.

“It was an opportune time to enhance both businesses, despite the current economic outlook,” Gladys Goh, senior vice president of strategic innovation and marketing at Nipsea, said in December. “Ultimately, both parties agreed that there is a mutual end-goal and vision for growing the brand and company.”

Nipsea didn't immediately respond to an email seeking comment on the family's net worth.

Shares Fall

Since the November high, Nippon Paint shares have dropped 32% -- possibly because the deal came with “a lot of expectations built in,” Bloomberg Intelligence's Chan said. Its completion also was delayed by overseas regulatory approvals.

While Goh was Singapore's richest person last year, Li Xiting has since supplanted him. The Chinese-born chairman of Shenzhen Mindray Bio-Medical Electronics Co., who holds Singapore citizenship, has benefited from a surge in shares of his medical-equipment maker as the coronavirus crisis pushed up demand for his company's products. He's worth $25 billion, according to the Bloomberg index.

Goh's other assets include a superyacht named White Rabbit, which has stayed docked in the city-state due to the Covid-19 pandemic, and the recent purchase of a Singapore property valued at $68 million, according to local media.

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