Japan Authority OKs Nisshin Steel, Nippon Metal Industry Integration

Japan Fair Trade Commission already approved proposed consolidation of Nisshin Steel and Nippon Metal Industry through the first stage of the screening, Japan Metal Bulletin confirmed the fact by Tuesday. Japanese steel industry’s major consolidation progresses just after the commission approved merger of Nippon Steel and Sumitomo Metal Industries on December 14. Nisshin Steel and Nippon Metal Industry start the integration activity through integration committee headed by the presidents to launch holding company through transferring their shares by October 2012.

The approval is earlier than the deadline of December 22 for the first stage of screening. The commission approved the integration of Nisshin Steel and Nippon Metal Industry without remedy while the combined company has larger share in cold rolled stainless flat steel. The commission allows the higher share for cold rolled products due to less than half of controlling when the combined share is 35% in fiscal 2010 ending March 2011 base in domestic market. The commission apparently intends to support their effort for better global competitiveness.

Nisshin Steel and Nippon Metal Industry will reach share transfer agreement by April. They make plan for the share transferring and hold each shareholders’ meeting. They will become wholly owned subsidiaries of the holding company and they will delist themselves and the holding company will apply for new listing.

The screening process is expected to take longer time. The commission could require additional information from the makers for second stage of the screening with maximum 90 days of period.