SUMITOMO METAL MINING CO., LTD. [Translation of a news release in Japanese on February 15, 2015]
March 8, 2016
To whom it may concern:
Company Name: Sumitomo Metal Mining Co., Ltd. Representative: Yoshiaki Nakazato,
President & Representative Director (Code Number: 5713; Listing: First Section of Tokyo
Stock Exchange)
Contact: Tsuyoshi Nozawa,
Manager of PR & IR Department
Telephone: +81-3-3436-7705
The Board of Directors of Sumitomo Metal Mining Co., Ltd. (the "Company" or "SMM") resolved at its meeting held on February 7, 2013 to renew a plan for countermeasures to large-scale acquisitions of the shares in the Company (the "Former Plan") and obtained the shareholders' approval at the ordinary general meeting of shareholders held on June 24, 2013 for the 88th fiscal year. The effective period of the Former Plan is until the conclusion of the ordinary general meeting of shareholders of the Company for the 91st fiscal year to be held toward the end of June 2016 (the "Ordinary General Meeting of Shareholders").
The Company announces that the Company's Board of Directors determined at its meeting held on February 15, 2016 to partially revise the basic policy regarding the persons who control decisions on the Company's financial and business policies (as provided in Article 118, Item 3 of the Enforcement Regulations of the Companies Act; the "Basic Policy") and to partially revise the Former Plan and introduce a renewed plan (the introduction is to be referred to as the "Renewal," and the renewed plan is to be referred to as the "Plan") as a measure to prevent decisions on the Company's financial and business policies from being controlled by persons deemed inappropriate (Article 118, Item 3(b)(ii) of the Enforcement Regulations of the Companies Act) under the Basic Policy after the revision. The Renewal will be subject to the approval of shareholders at the Ordinary General Meeting of Shareholders. At the Board of Directors meeting described above, the Company Directors who attended unanimously approved the Renewal and none of the Company's Audit & Supervisory Board Members who attended raised any objections in respect of the Renewal.
The members of the Company's Independent Committee have also unanimously approved the Renewal.
Major amendments to the Former Plan are, among others, (i) adjustment of the scope of the Essential Information (as defined below) and (ii) modification of the procedures for triggering the Plan.
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Basic Policy Regarding the Persons Who Control Decisions on the Company's Financial and Business Policies
The Company develops its business in mineral resources such as non-ferrous metals (mainly copper, nickel and gold), and engages in smelting and refining of those mineral resources for its customers under its principal operations, Mineral Resources and Smelting & Refining. The Company continues to promote its growth strategy with its three core businesses, namely, Mineral Resources and Smelting & Refining described above as well as Materials, which is a business in the downstream sector, and consequently has become one of the few Japanese companies to hold a position as a non-ferrous metal company that owns and operates multiple mines and refineries both in Japan and overseas while continuing to increase interests in mineral resources overseas. Non-ferrous metals are materials that not only enrich the lives of people in Japan but are also essential to maintain Japan's international competitiveness, and therefore their stable supply is highly important for the nation's development. The Company believes that, as a leading non-ferrous metal production company in Japan, the Company's social responsibility is to secure interests in non-ferrous metal resources and continue to stably supply non-ferrous metals both domestically and internationally.
Japan is one of the major producers and consumers of non-ferrous metals in the world. However, as it is difficult to domestically procure metal resources, their supply is dependent on countries outside Japan.
Worldwide, there is an oligopoly over non-ferrous metal resources by the super major resource companies and the efforts by emerging countries for securing mineral resources and energy have not abated. In addition, factors such as the heightening of resource nationalism in countries that possess resources and the increasing difficulty of developing new and promising mines due to their tendency for being in high-lying or remote locations are making it more difficult to secure mineral resources. Taking into consideration these worldwide trends and activities involving "resources," we cannot deny that there is a possibility that unilateral large-scale acquisitions of shares in the Company, which owns promising resources both domestically and internationally, will be implemented.
The Company believes that the persons who control decisions on the Company's financial and business policies need to be persons who understand the source of the Company's corporate value and who will make it possible to continually and steadily ensure and enhance the Company's corporate value and, in turn, the common interests of its shareholders.
The Company will not unconditionally reject a large-scale acquisition of the shares from the outset if it will contribute to the corporate value of the Company and, in turn, the common interests of its shareholders. The Company also believes that any decision on a proposed acquisition that would involve a change of control of the Company must ultimately be made by its shareholders as a whole.
Nonetheless, there are some forms of corporate acquisition that deteriorate the corporate value of the target company and the common interests of its shareholders including those with a purpose that would obviously harm the corporate value of the target company and the common interests of its shareholders, those with the potential to substantially coerce shareholders into selling their shares, those that do not provide sufficient time or information for the target company's board of directors and shareholders to consider the details of the large-scale acquisition or for the target company's board of directors to make an alternative proposal, and those that require the target company to negotiate with the acquirer in order to procure more favorable terms for shareholders than those presented by the acquirer.
The Company believes that, in order to ensure and enhance the corporate value of the Company and, in turn, the common interests of its shareholders, it is necessary to ensure and enhance the source of the corporate value of the Company, mainly including those matters described below, over the medium to long term.
The business model under which the Company consistently conducts smelting and refining and then supplies downstream materials, while owning non-ferrous mineral resources;
The owning of mineral resource interests on a global scale and the capacity for mine development;
Original and advanced smelting and refining technology and know-how;
The business model under which the Company applies its technological capabilities developed in the Mineral Resources and Smelting & Refining Businesses to the downstream Materials Business;
Sound financial position such as a high level of equity ratio; and
The relationship of trust with shareholders and other stakeholders.
Unless an acquirer who makes a large-scale acquisition of the shares in the Company ensures and enhances the source of the corporate value of the Company over the medium to long term, the corporate value of the Company and, in turn, the common interests of its shareholders would be harmed.
The Company believes that persons who would make a large-scale acquisition of the shares in the Company in a manner that deteriorate the corporate value of the Company or the common interests of its shareholders would be inappropriate to become a person who would control decisions on the Company's financial and business policies. The Company also believes that it is necessary to ensure the corporate value of the Company and, in turn, the common interests of its shareholders by taking the necessary and reasonable countermeasures against a large-scale acquisition by such persons.
- The Source of the Company's Corporate Value and Special Measures to Realize the Basic Policy
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Corporate Philosophy and Management Vision
Sumitomo Group has been developing its business for over 400 years by carrying out its operations based on the Sumitomo Business Spirit. Acknowledging the importance of the values and ethics our forerunners built into the Sumitomo Business Spirit, we have made every effort to strengthen the business and consolidate society's trust in us. We have formulated the "SMM Group Corporate Philosophy" and the "SMM Group Management Vision" below based on the Sumitomo Business Spirit.
SMM Group Corporate Philosophy
SMM, in accordance with the Sumitomo Business Spirit, shall, through the performance of sound corporate activities and the promotion of sustainable co-existence with the global environment, seek to make positive contributions to society and to fulfill its responsibilities to its stakeholders, in order to win ever greater trust.
SMM shall, based on respect for all individuals and recognizing each person's dignity and value, seek to be a forward-minded and vibrant company.
SMM Group Management Vision
By developing and employing innovative technology, we shall fulfill our social responsibilities as a manufacturing enterprise.
Sumitomo Metal Mining Co. Ltd. issued this content on 08 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 08 March 2016 09:24:20 UTC
Original Document: http://www.smm.co.jp/E/uploaded_files/20160308e.pdf
