Nippon Steel Gets Clearance for Take Over of Sumitomo Metal
21.05.12
(Updates with merger plans in second paragraph.)
Dec. 14 (Bloomberg) -- Nippon Steel Corp., Japan's largest steelmaker, received clearance for its 685 billion yen ($8.8 billion) all-share purchase of Sumitomo Metal Industries Ltd. to create the world's second-biggest steelmaker.
The Japan Fair Trade Commission announced its approval of the deal at a press conference in Tokyo today. The merger will be completed by October next year, the companies said today. Nippon Steel is offering 0.735 of its shares for each Sumitomo Metal share, they said in September. Including assumed debt, the transaction is worth about 1.7 trillion yen.
Nippon Steel and Sumitomo Metal want to combine to counter intensifying competition from Asian and European rivals in what may be the country's largest non-bank takeover. That dovetails with government efforts to encourage takeovers to boost growth in the world's third-largest economy.
“It's a positive move as Japanese companies face rising global competition,” said Naoki Iizuka, a senior economist at Mizuho Securities Co. “It's necessary to have an industrial policy to push major companies to consolidate so they can expand economies of scale.”
Source: BusinessWeek