Nippon Steel announces to merge with Nippon Steel & Sumikin Koutetsu Wakayama Corporation

2018-01-03

Dec. 27, 2017 - Nippon Steel & Sumitomo Metal Corporation (“NSSMC”) hereby announces that NSSMC and its consolidated subsidiary Nippon Steel & Sumikin Koutetsu Wakayama Corporation (“NSSKW”) resolved today to implement a merger (the “Merger”), in which NSSMC will be the surviving company and NSSKW will be the absorbed company, effective on April 1, 2018, and executed a merger agreement.

1. Purpose of the Merger 

NSSKW, a consolidated subsidiary of NSSMC, is a company which undertakes the upstream operations (ironmaking and steelmaking operations) of NSSMC’s Wakayama Works, and has supplied semi-finished products for seamless steel pipes which are mainstay products of NSSMC’s Wakayama Works and semi-finished products for NSSMC’s other steelworks. 

The business of NSSKW will be continued as the upstream operations (ironmaking and steelmaking operations) of NSSMC’s Wakayama Works, and through the Merger, NSSMC will strive to further enhance its management efficiency by utilizing NSSMC’s business infrastructure. 

By promoting measures to enhance competitiveness, including the Merger, NSSMC is determined to further improve its strengths (i.e., technological superiority, cost-competitiveness and worldwide capabilities) and ensure the position of NSSMC as the “Best Steelmaker with World-Leading Capabilities”, thereby aiming to achieve sustainable growth and enhance our corporate value.

2. Outline of the Merger 

Resolution of the Board of Directors on the Merger (NSSMC): December 27, 2017 

Execution date of the merger agreement: December 27, 2017 

Effective date of the Merger: April 1, 2018 (plan) 

3. Method of the Merger 

The Merger is an absorption-type merger in which NSSMC will be the surviving company and NSSKW will be the absorbed company. Upon the Merger, NSSKW will be dissolved. 

Although NSSKW had excessive debt as of March 31, 2017, NSSKW will resolve it by implementing a capital increase through third-party allotment to NSSMC (the “Capital Increase”) prior to the Merger. As a result, NSSMC is expected to become the special controlling company of NSSKW (NSSMC’s shareholding: approx. 99.97%).

4. Situation after the Merger 

There will be no change in NSSMC’s trade name, description of business activities, head office location, representative, capital or date of fiscal year end as a result of the Merger.