Nisshin Steel and Japanese stainless maker, Nippon Metal Industry announced on Tuesday they agreed to start study for merger on October 1, 2012. They establish a holding company through jointly transferring their respective shares and will become wholly owned subsidiaries of the holding company. They will delist themselves and the holding company will apply for new listing. They try to improve the international competitiveness for survive through the synergy in technology and facilities for global growth under shrinking domestic market.
The combined company has around 1 million tonnes of annual stainless output capacity to match Japanese largest stainless maker of Nippon Steel & Sumikin Stainless Steel (NSSC). The new company has the largest 35% of domestic share in cold rolled stainless flat steel in fiscal 2010 basis. They finally announced the merger after the discussion as Japan Metal Bulleting reported before. Nisshin Steel has 5.1% share in Nippon Metal Industry and is the largest shareholder of Nippon Metal Industry. They have partnership since October 2004 when Nissin Steel commissioned maximum monthly 5,000 tonnes of stainless hot rolling process of slab from Shunan plant to Nippon Metal Industry’s Kinuura plant. They entered into the merger talk when Japan Fair Trade Commission revised the merger guideline in June from domestic share to global market share and potential availability of offshore products. Pending merger of Nippon Steel and Sumitomo Metal Industries apparently pushed the stainless makers’ move. Nisshin Steel focuses on special flat steel, coated steel and stainless. The firm established offshore supply bases through joint ventures with Baosteel Group of China and Acerinox of Spain. Nisshin Steel has the widest global supply network in Japanese stainless makers. Nippon Metal Industry started the business in 1932 and developed the technology as stainless focused integrated maker. The firm launched Thai joint sales company for stainless precision rolled products. The firm has subsidiaries in Malaysia and Singapore while the form established sales force with Taiwanese maker and Marubeni-Itochu Steel for precision rolled products in Taiwan.