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    5802   JP3407400005

SUMITOMO ELECTRIC INDUSTRIES, LTD.

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3M to buy Sumitomo stake for $885 million to control Japan business

07/16/2014 | 11:34am EST

(Reuters) - 3M Co (>> 3M Co) will pay about $885 million (516.49 million pounds) for Sumitomo Electric Industries Ltd's (>> Sumitomo Electric Industries, Ltd.) stake in their Japan joint venture, giving the diversified U.S. manufacturer full control of the business, 3M said on Wednesday.

(Reuters) - 3M Co (>> 3M Co) will pay about $885 million (516.49 million pounds) for Sumitomo Electric Industries Ltd's (>> Sumitomo Electric Industries, Ltd.) stake in their Japan joint venture, giving the diversified U.S. manufacturer full control of the business, 3M said on Wednesday.

The deal is expected to add about 8 cents per share to earnings in the first 12 months after it closes, 3M said. Analysts, on average, expect 3M to earn $7.46 per share in 2014, according to Thomson Reuters I/B/E/S.

The company will buy Sumitomo's 25 percent stake in the Sumitomo 3M Ltd subsidiary for 90 billion Japanese yen. The cash transaction will give 3M 100 percent ownership upon the expected closing of the deal in September.

3M's share of earnings from Japan will rise to 10 percent from 9 percent previously due to the transaction, analysts at William Blair estimated.

"While Japan may be growth challenged, the business is profitable and strong for 3M," Sanford Bernstein analyst Steven Winoker wrote in a research note.

The joint venture was formed in 1961 between 3M, Sumitomo and NEC Corp (>> NEC Corp). 3M acquired NEC's stake in 2003, increasing 3M's interest to 75 percent.

3M has said it plans to spend $5 billion to $10 billion on acquisitions through 2017, including possible "multibillion-dollar" transactions that could exceed its previous deal sizes of as much as $1 billion apiece.

3M shares were up 0.2 percent to $145.37 in morning trading on the New York Stock Exchange.

(Reporting by Lewis Krauskopf; Editing by Bernadette Baum)

Stocks treated in this article : 3M Co, Sumitomo Electric Industries, Ltd., NEC Corp

ę Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
3M COMPANY -4.15% 163.1 Delayed Quote.-8.18%
NEC CORPORATION -3.67% 4465 Delayed Quote.-15.91%
RISE, INC. 5.26% 20 Delayed Quote.-4.76%
SUMITOMO ELECTRIC INDUSTRIES, LTD. 2.15% 1499 Delayed Quote.-0.03%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.00% 115.19 Delayed Quote.0.24%
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Financials
Sales 2022 3 295 B 28 590 M 28 590 M
Net income 2022 93 579 M 812 M 812 M
Net Debt 2022 513 B 4 451 M 4 451 M
P/E ratio 2022 12,5x
Yield 2022 3,30%
Capitalization 1 169 B 10 151 M 10 145 M
EV / Sales 2022 0,51x
EV / Sales 2023 0,45x
Nbr of Employees 286 784
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Number of Analysts 9
Last Close Price 1 499,00 JPY
Average target price 1 853,33 JPY
Spread / Average Target 23,6%
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Osamu Inoue Manager-Automobile
Masayoshi Matsumoto Director
Junji Ito Executive Officer
Hiroshi Sato Independent Outside Director
Michihiro Tsuchiya Independent Outside Director
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