Nippon Steel and Sumitomo Metal Industries announced on Friday they decided top managements of the combined new company nominating Nippon Steel’s president Shoji Muneoka as chairman and CEO and Sumitomo Metals’ president Hiroshi Tomono as president and COO. They will reach final agreement for the merger in April to launch the new company in October.
Mr. Muneoka said at press conference they utilize the combined resources to create best steel maker with world leading capabilities with world leading technology and cost competitiveness and global production and sales base through the merger under severe business condition. Mr. Tomono said the management and employees focus on effort to improve the corporate value. Mr. Muneoka said the new company can realize synergy at more than original estimate while they expected annual 150 billion yen of synergy in around 3 years after the merger. He said the merger would me a model for Japanese company to survive in international competition through consolidation. They will share the roles to accelerate the integration. Mr. Muneoka leads the new company as chairman and CEO and chairs board meeting and shareholder meeting. Mr. Tomono controls daily operation as president and COO. The chairman attends to World Steel Association as the head of the company while the president assumes roles of Japan Iron and Steel Federation. They started study for the merger in February 2011 to reach basic agreement in September 2011. Japan Fair Trade Commission approved the proposed merger in December 2011. They got approvals from offshore authorities in USA, Germany, Russia, Brazil and South Korea while Chinese authority is in review process. The combined company will be world No.2 steel maker with annual 5.5 trillion yen of sales and 48 million tonnes of raw steel output. The company targets 60-70 million tonnes of production through aggressive activity to establish offshore supply network. The firm tries to secure more than 10% of recurring profit on the sales.