NISSHIN STEEL CO. 
By
November 15, 2011
Nisshin Steel Co., Ltd. Nippon Metal Industry Co., Ltd.
Commencement of Consideration of Business Integration of
Nisshin Steel Co., Ltd. and Nippon
Metal Industry Co., Ltd.
Nisshin Steel Co., Ltd. (Location: Chiyoda-ku, Tokyo;
President: Toshinori Miki) ("Nisshin") and Nippon Metal
Industry Co., Ltd. (Location: Chiyoda-ku, Tokyo; President:
Hiroshi Yoshimura) ("Nikkinko") (collectively, "Companies")
have entered into a basic agreement today to begin the
consideration for integration of their businesses ("Business
Integration") targeted for October 1,
2012, assuming that the Companies obtain the approvals such
as approvals of their respective shareholders at the
shareholders' meeting and approvals of relevant authorities
including the Japan Fair Trade Commission. The Companies will
give concrete considerations to the Business
Integration in the spirit of equal partnership.
Rule 802 Legend
This exchange offer or business combination is made for the
securities of a foreign company. The offer is subject to
disclosure requirements of a foreign country that are
different from those of the United States. Financial
statements included in the document, if any, have been
prepared in accordance with foreign accounting standards that
may not be comparable to the financial statements of United
States companies.
It may be difficult for you to enforce your rights and any
claim you may have arising under the federal securities laws,
since the issuer is located in a foreign country, and some or
all of its officers and directors may be residents of a
foreign country. You may not be able to sue a foreign company
or its officers or directors in a foreign court for
violations of the U.S. securities laws. It may be difficult
to compel a foreign company and its affiliates to subject
themselves to a U.S. court's judgment.
You should be aware that the issuer may purchase securities
otherwise than under the exchange offer, such as in open
market or privately negotiated purchases.
I. Objectives of Business Integration
1. Background and Objectives of Business Integration
In order to strengthen the cost competitiveness in the
stainless steel business, from 2004, the Companies have
promoted various cooperative measures such as production
consignment and have achieved success. However, the business
environment of stainless steel industry has been going
through drastic changes in recent years due to the facts such
as dramatic increase in production capacity of stainless
steel competitors overseas, intensification of competition in
the global market, reduction in demand for stainless steel in
the Japanese market, popularization of imported steel
materials and concerns against increase in import volume of
imported steel materials. In order to continue to enhance the
corporate value of the Companies by expanding the business
platform and by strengthening the stainless steel business
and to continue to receive support from all stakeholders
including the customers, shareholders and employees now and
hereafter under such circumstances, the Companies believe
that it is indispensable for them to further tighten their
relationship and have come to an agreement on the Business
Integration.
2. Goals to be Achieved after Business Integration
The new company created as a result of Business Integration
("Integrated Company") will endeavor to achieve the following
goals in order to develop a firmer business platform by
integrating business resources, to become No. 1 manufacturer
in stainless steel business in Japan overall (i.e.,
technology, development, marketing and earnings), to make a
leap to become one of the top stainless steel manufacturers
in the world, and to ensure stable product quality, cost and
service to domestic and oversea customers:
(1) The Integrated Company will assemble the most suitable
production system by taking full advantage of the strength of
the Companies by taking into account the characteristics of
finished products and production lines of the Companies. The
Companies will also endeavor to achieve dominant cost
competitiveness by making more efficient capital
expenditures.
(2) The Integrated Company will endeavor to meet a larger
scope of customer demands and to further enhance the brand
value by combining the marketing structures and sales
channels of the Companies with special characteristics:
Nisshin, which specializes in the sales to large or specific
customers, and Nikkinko, which is well-known for its retail
sales to small and mid-size customers.
(3) The Integrated Company will endeavor to develop and to
provide products that will please the customers by taking
full advantage of tangible and intangible business resources
of the Companies and by concentrating the technologies and
development capacities of the Companies.
(4) Through Business Integration, the Integrated Company will
reap the benefits of volume discounts on raw materials, for
which the prices are in a rising trend, due to the increase
in their purchase volume.
(5) The Integrated Company will grasp the expanding overseas
markets by using the overseas networks of the Companies and
will keep up with the globalization of customers and their
shift to overseas production.
The Integrated Company will give all efforts to promptly
achieve the above goals and to obtain maximum synergy effects
as soon as possible by unifying the Companies which are steel
manufacturers with a long history in the stainless steel
business.
II. Outline of Integration Plan
The Companies will work toward Business Integration in
accordance with the following details, assuming that the
Companies obtain the approvals of their respective
shareholders at the shareholders' meeting and approvals of
relevant authorities:
1. Form of Business Integration
The Companies will establish a holding company by jointly
transferring their respective shares and will become
wholly-owned subsidiaries of such holding company. As a
result, the Companies will delist themselves, and the holding
company, which will become the wholly-owning parent company
of the Companies, is scheduled to apply for new listing.
2. Schedule (Tentative)
- November 15, 2011: Execution of letter of intent on the
commencement of consideration of Business Integration
(executed today)
- October 1, 2012: Effective date of Business Integration
The Companies will also execute a share transfer agreement
and complete the drafting of share transfer plan by April
2012 at the latest and will respectively hold shareholders'
meetings in order to obtain the approvals for Business
Integration as soon as possible. However, if any event occurs
which will make the promotion of Business Integration plan
practically impossible in the course of proceeding with the
procedures and discussions on Business Integration due to
problems relating to the filings with (including filings
under the non-Japanese laws), or procurement of approvals
from, the relevant authorities such as the Japan Fair Trade
Commission or due to other reason or if any other significant
problem arises which may cause the achievement of objectives
of Business Integration to become very difficult, there is a
possibility that the Companies will amend the Business
Integration plan including the schedule or will reconsider
the promotion of Business Integration, upon good faith
discussion and agreement between the Companies.
3. Basic Matters on the Holding Company (such as company
name, location of head office, name of representative,
composition of officers and organization structure)
The Companies will decide later upon discussion.
4. Business Integration Ratio
The Companies will decide on the Business Integration ratio
(i.e., number of shares in the holding company which the
shareholders of respective Companies will receive upon share
transfer of their shares in the Companies) upon discussion by
taking into account the assessments and advices of third
parties to be appointed respectively by the Companies.
III. Promotional Structure for the Study of Business
Integration
The integration study committee will be formed with the
presidents of Companies as joint chairpersons and will begin
the study on matters such as organizational structure and
business outlook after the Business Integration. The earnings
forecast of holding company will be announced as soon as it
is determined by taking into account factors such as the
results of assessment of the integration study committee.
Any undecided matters on the Business Integration will be
announced as soon as they are decided.
End
[Contact Information for any Questions on Business
Integration]
Nisshin Steel Co., Ltd.: Public & Investor Relations Team of
General Administration & Risk Management Department Tel:
+81-3-3216-5566
Nippon Metal Industry Co., Ltd.: IR Section of Corporate
Planning Department
Tel: +81-3-3500-5645
(Reference Materials) Overview of Nisshin Steel Co., Ltd. and
Nippon Metal Industry Co., Ltd.
Ltd. (account in trust) 3.12% Taiyo Life Insurance
Company 2.66% The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2.48% Nippon Life Insurance
Company 2.01% Mizuho Corporate Bank, Ltd. 1.78% Nipponkoa Insurance Co.,
Ltd. 1.58% Japan Trustee Services Bank, Ltd. (account in trust No. 9) 1.36% Sumitomo Life Insurance
Company 1.31% (as of March 31, 2011)
Resona Bank, Limited 2.44% The Bank of Yokohama, Ltd. 2.44% Marubeni-Itochu Steel Inc. 2.20% Hanwa Co., Ltd. 1.88% Taiyo Stainless Spring Co.,
Ltd. 1.81% Chofu Seisakusho, Ltd. 1.73% Maruzen Showa Unyu Co.,
Ltd. 1.72% (as of March 31, 2011)
(13) Relationship between the Companies | |
Capital Ties | As of March 31, 2011, Nisshin Steel Co., Ltd. holds 9,500,000 shares representing 5.12% of issued shares in Nippon Metal Industry Co., Ltd., and Nippon Metal Industry Co., Ltd. holds 5,000,000 shares representing 0.50% of issued shares in Nisshin Steel Co., Ltd. |
Personnel Ties | No notable personnel ties exist between Nisshin Steel Co., Ltd. and Nippon Metal Industry Co., Ltd. No notable personnel ties exist between the person or company related to Nisshin Steel Co., Ltd. and the person or company related to Nippon Metal Industry Co., Ltd. |
Business Ties | Nisshin Steel Co., Ltd. and Nippon Metal Industry Co., Ltd. are engaged in transactions under which they have consignor/consignee relationship for the supply and manufacture of parts of semi-finished products and finished products of stainless steel. |
Status Applicable to the Related Parties | Nippon Metal Industry Co., Ltd. and people and companies related to Nippon Metal Industry Co., Ltd. are not parties related to Nisshin Steel Co., Ltd. Nisshin Steel Co., Ltd. and people and companies related to Nisshin Steel Co., Ltd. are not parties related to Nippon Metal Industry Co., Ltd. |
(14) Operating Results and Financial Position of Past 3 Years | ||||||
Fiscal Year | Nisshin Steel Co., Ltd. (Consolidated Basis) | Nippon Metal Industry Co., Ltd. (Consolidated Basis) | ||||
Fiscal Year | Fiscal Year Ending in | Fiscal Year Ending in | Fiscal Year Ending in | Fiscal Year Ending in | Fiscal Year Ending in | Fiscal Year Ending in |
March 2009 | March 2010 | March 2011 | March 2009 | March 2010 | March 2011 | ||||||||||||||||||||||||||
Consolidated Net Assets | 260.6 billion yen | 205.3 billion yen | 205 billion yen | 25.5 billion yen | 21.3 billion yen | 22 billion yen | |||||||||||||||||||||||||
Consolidated Total Assets | 722.2 billion yen | 670.3 billion yen | 663.8 billion yen | 90.2 billion yen | 90 billion yen | 90.8 billion yen | |||||||||||||||||||||||||
Consolidated Net Assets per Share | 282.23 yen | 220.56 yen | 219.94 yen | 154.67 yen | 123.25 yen | 121.73 yen | |||||||||||||||||||||||||
Consolidated Sales | 617.3 billion yen | 441.4 billion yen | 545.3 billion yen | 120.1 billion yen | 75.7 billion yen | 93.2 billion yen | |||||||||||||||||||||||||
Consolidated Operating Income | Share
© Publicnow - 2011
|
