Nippon Steel Signs Agreements To Acquire Key Local and Overseas Assets

SEATTLE (Scrap Monster): Japanese steel maker Nippon Steel & Sumitomo Metal Corporation (NSSMC) has announced plans to go ahead with planned acquisitions-both local and overseas. The company had recently entered into an agreement with ArcelorMittal to jointly acquire assets of bankrupt Essar Steel in India. The company press release states that it has already commenced negotiations for acquiring local Sanyo Special Steel Co. Also, NSSMC has entered into a share purchase agreement towards acquisition of Swedish special steel maker Ovako AB.

The purchase of Swedish Ovako is a strategic move by the Japanese steel giant to create a manufacturing base in Europe. Further, it would give the company, a sales network in Europe. Through the acquisition, NSSMC aims to further strengthen its technology and product development capability for special steel. It expects to finish the procedures for the transaction by the first half of the fiscal year 2018. The financial details of the acquisition were not disclosed. Incidentally, Ovako employs nearly 3,000 employees and had reported total sales of nearly 780,000 tons in 2017.

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Meantime, Nippon Steel has commenced discussions to strengthen its special steel business by acquiring Japanese Sanyo Special Steel Company Ltd. A definitive agreement to this effect is expected to be signed in August this year. NSSMC hopes that the company would become its subsidiary by March 2019, subject to necessary approvals and domestic and overseas competition authorities.

Earlier on March 2, NSSMC had reached an agreement with ArcelorMittal to form a joint venture to acquire and manage the assets of bankrupt Essar Steel India Limited.

The above acquisition bids are in line with the company’s new three-year management plans to strengthen its presence across geographies.