Sumimoto Metal and Nippon Steel thrash out $22bn merger

NIPPON 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.