Japan's Two Chemical Giants Taiyo and DIC Consider Merger

Taiyo Holdings Co. is exploring a merger with its larger peer DIC Corp., a move that would integrate Japan's two largest chemical companies, according to people familiar with the matter.

Taiyo is considering working with private equity firm Japan Industrial Partners Inc. (JIP) for the potential deal, the people said. Because the matter is not public, the two Tokyo-based companies are working with advisers to conduct preliminary evaluations of a possible transaction, the people said.

Taiyo shares rose 32% in 2024, giving the company a market value of about $1.5 billion. DIC is Taiyo's largest shareholder, with a stake of more than 19%. DIC shares rose 22% in 2024, giving it a valuation of $2 billion, and Hong Kong-based investor Oasis is its second-largest shareholder, with a stake of 11.5%.

The deliberations are still ongoing and may not result in a deal, the people said. Representatives for Taiyo, JIP and DIC declined to comment.

DIC acquired a 19.5% voting stake in Taiyo in 2017 as part of an equity offering and alliance between the two companies.

Taiyo produces chemical products used in the electronics industry, including printed circuit boards, and the company is also involved in pharmaceuticals and other fields. DIC specializes in printing inks, organic pigments and resins.