Japan’s largest chemical company is to offer $3,4 billion to buy Arihants leading chemical industry.
Arianhant will sell to Japanese conglomerate Asahi Chemicals, which owns Arianhalon and its other brands including Sake and Gekko.
The deal was first reported by The Wall St. Journal.
Reuters reported the deal as a surprise, citing people familiar with the matter.
Arihans sales surged 40 percent in Japan last year.
Its shares have climbed more than 50 percent since the start of the year.
The Nikkei 225 index of stocks fell about 0.7 percent in Tokyo, while the Hang Seng Index of shares fell 1.3 percent.
Reuters and Bloomberg have not independently verified the reports.
Japan’s leading chemical companies, including Asahi, have struggled amid an economic slowdown that has put pressure on their bottom lines.
The Asahi deal, which would be the biggest acquisition by a Japanese conglomerate, could help bolster the company’s cash flow, said Takahiro Takagi, an analyst at Mizuho Securities Inc. in Tokyo.
Arihs business in the U.S. is dominated by the popular brands Sake, Geko and Genshin.
The company said last year that it plans to sell about 10 million tonnes of chemicals annually, or about one-third of its annual volume.
The Japanese giant is also aiming to boost its exports in the near term by selling a majority stake in its existing business in China, where it also makes some products.
“We have to increase our exports as the market for our products is changing, so we will try to sell more of the products we manufacture in Japan,” said Kazuhiko Sato, a spokesman for Arihance, the company that owns Arihan, in a statement.