Nippon Paints Holdings has agreed to buy Australia’s DuluxGroup for 300 billion yen, or $2.6 billion, boosting the Japanese paint manufacturer’s global growth ambitions.

The Tokyo-headquartered company has offered 9.80 Australian dollars per share in cash, representing a 28% premium on DuluxGroup’s closing price on Apr. 16.

DuluxGroup’s board is unanimously recommending the offer, with shareholders expected to vote at a meeting to be held in late July. “The board has carefully considered the strategic options available to DuluxGroup to maximize value, including continuing to pursue domestic and global growth as a stand-alone company, and we have unanimously concluded that the transaction with Nippon is in the best interests of our shareholders,” said DuluxGroup chairman Graeme Liebelt.

The acquisition, which remains subject to certain closing conditions, including shareholder approval and antitrust clearance in Australia and New Zealand, is expected to complete in mid-August.

Nippon Paint will finance the acquisition through a new debt facility, although the company  added that the deal is not conditional on its securing funds.

The agreement also includes provisions for break fees on both sides, each equivalent to roughly $38 million.

DuluxGroup is Australia and New Zealand’s leading paint manufacturer with revenues of around $1.3 billion in the fiscal year ending September 2018. Atsushi Yoshida, senior analyst at Mizuho Securities, told Japan’sNikkei newspaper that the deal is a good one and there is no overlap as DuluxGroup operates in areas that Nippon Paint has not entered.

Currently, Nippon has no operations in Australia or New Zealand. The Japanese group said the Australian paint market is attractive and offers stable growth, which it expects to continue, and DuluxGroup has shown a stable and continuous track record of growing profitability since its demerger in 2010.

DuluxGroup was part of Orica, formerly ICI Australia, until it listed as an independent company on the Australian Stock Exchange in July 2010.

In November 2017, Nippon Paint made an all-cash offer for Axalta Coating Systems after talks between the US-based coatings group and Dutch paintmaker AkzoNobel about a potential merger broke down. However, Nippon and Axalta failed to reach an agreement.