Singapore paint tycoon Goh Cheng Liang's partnership with Nippon Paint began in the 1950s.

SINGAPORE (BLOOMBERG) – Almost a decade ago, the son of Singapore paint tycoon 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 took a majority stake in Nippon Paint Holdings in a US$12 billion (S$16 billion) deal that was completed last month, according to filings this week. That’s boosted their fortune to US$24 billion from about US$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 per cent.

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

British surplus

Mr 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 Singapore that they named the Nippon Paint South-East Asia Group, or Nipsea. Mr Goh’s son, Hup Jin, 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.

“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 33 per cent – 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 Mr Goh was Singapore’s richest person last year, Li Xiting has since supplanted him. The Chinese-born chairman of Shenzhen Mindray Bio-Medical Electronics, 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 US$25 billion, according to the Bloomberg index.

Mr 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 US$68 million, according to local media.