Nippon Paint Holdings Co., Japan’s biggest paint maker, struck a ¥1.29 trillion ($12.2 billion) deal to join with Singapore-based Wuthelam Holdings Pte, seeking to create a dominant paints and coatings company in Asia.

The deal involves Wuthelam taking a majority stake by buying new shares in Nippon Paint, which will use the bulk of the money to buy out their joint ventures in China, India, Malaysia, Singapore, South Korea and Thailand. Nippon Paint will also buy out Wuthelam’s 100 percent-owned Indonesia business for about $2 billion (¥211 billion).

Nippon Paint has had ties with Wuthelam for more than 50 years and in 2013, the Singaporean firm began efforts to gain majority control of the Japanese company. They decided to unify their Asian businesses to seek "more ambitious moves” to grow and deliver shareholder returns, they said in a statement.

"Asian companies are getting stronger and narrowing the competition gap with Japanese businesses,” said Mitsushige Akino, senior executive officer at Ichiyoshi Asset Management Co. "There could be more consolidation in the basic materials space. Looking at it in terms of auto production, spreading into Asian countries makes sense.”

Wuthelam’s stake in Nippon Paint will eventually reach 58.7 percent when the transaction closes in January, said Nomura Holdings Inc., Nippon Paint’s sole financial adviser in the transaction.

Shares of Nippon paint jumped as much as 5.1 percent in afternoon trading in Tokyo.

"The many applications of paint include residential and commercial construction, transport applications such as cars and trains, and infrastructure such as bridges and roads, meaning that demand for paint grows in step with population growth and urbanization,” Nippon Paint said in the statement, adding that these trends are strongest in Asia and are likely to deliver greater sales growth.