NLM to Sell Shin Nikkei’s All Share to JS Group

Nippon Light Metal (NLM) announced on Monday the firm sells all shares of Shin Nikkei Company, NLM’s subsidiary to manufacture architectural aluminium products, to JS Group Corporation toward 1 April, 2010. JS Group will make Shin Nikkei its subsidiary after the share acquisition. This means NLM’s de facto withdrawal from architectural material business because Shin Nikkei accounts for almost all of the business in NLM Group.

NLM judged JS Group is the most stable maker of architectural aluminium materials which can keep Shin Nikkei’s brand and secure workers’ employment. At the same time, NLM can improve its corporate value by the withdrawal.

NLM announced an alliance with Sankyo-Tateyama Holdings for architectural aluminium material business in April 2008. The companies agreed in mutual OEM and other cooperation to gain total 10 billion yen cost cut synergy per year.

In March 2009, NLM announced another alliance scheme among NLM, Shin Nikkei, JS Group and Tostem Corporation, along which JS Group acquires about 30% shares in Shin Nikkei and sends board members. The 4 companies aimed tie-up synergies such as cost reduction for distribution and material procurement.

NLM had held 2 alliance schemes for architectural aluminium material business with Sankyo-Tateyama Holdings and JS Group. Japanese aluminium re-rollers and concerned players were interested in which company NLM chooses as a final business partner.

NLM’s consolidated annual revenue was 554 billion yen for fiscal 2008 ended in March 2009, 140 billion yen of which came from the architectural material business unit. Shin Nikkei’s annual revenue was 138.3 billion yen for fiscal 2008.

NLM will release sash and exterior business for houses and buildings by selling Shin Nikkei. NLM’s consolidated revenue will widely shrink but the profit is expected to improve by the withdrawal from the unprofitable business.