Paint fills a bucket on a conveyor at the Nippon Paint plant in Qingyuan, Guangdong Province, China.

Investors cheered Nippon Paint Holdings’ plans to buy U.S. chemical producer AOC from private equity firm Lone Star Funds for $2.3 billion (¥334.1 billion).

Tokyo-listed Nippon Paint, which is majority owned by Singapore billionaire Goh Cheng Liang, announced on Monday that it will acquire all of the equity interests of AOC’s holding company, LSF11 A5 TopCo, from Lone Star Fund XI. At the close of Tokyo Stock Exchange trading Tuesday, Nippon Paint shares were up 14%.

Nippon Paint said it expects to close the deal in the........

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