Sumimoto Metal and Nippon Steel thrash out $22bn merger

ON S

ON Steel and Sumitomo Metal Industries said yesterday that stakeholders of Sumitomo would get 0.735 Nippon Steel shares for each Sumitomo share if they combine to create the world’s second-biggest steelmaker, in what would be Japan’s biggest non-financial sector merger.

The ratio, largely in line with expectations, means the transaction would be worth about $22.45bn (£14.6bn), including Sumitomo’s net debt, trumping the $17.53bn acquisition of Vodafone KK by Softbank in 2006. The new firm, to be called Nippon Steel & Sumitomo Metal, would target global output of 60-70m tonnes a year by accelerating overseas expansion, the two companies said.

“We’ll aggressively expand into overseas markets,” Shoji Muneoka, president of Nippon Steel.