Kyoei Steel, Tokyo Tekko to Merge

Osaka based Kyoei Steel and Tochigi based Tokyo Tekko announced on Wednesday they agreed to merge for better competitiveness under oversupply for shrinking concrete reinforcing steel bar demand. They establish holding company in October to control the operations. While they keep talking for merger ratio, they expect Kyoei Steel’s shareholders get one share of the new holding company per the share and Tokyo Tekko’s shareholders receive the new company’s 0.15 shares per the share.

Kyoei Steel’s president Ryutaro Yoshioka will be president of the new company while Tokyo Tekko’s president Tsunebumi Yoshihara will assume the chairman’s role. The headquarters will be same as Kyoei Steel’s headquarters in Osaka.

They agreed in May 2008 for comprehensive technology tie-up to consolidate property of mechanical joint of rebar and to cooperate in environmental recycling business. Through the cooperation, they started talk for potential merger to combine the resources.

Through the merger, they can cover the nationwide market of rebar while they reduce the operating and development cost along with procurement synergy. They also expand the recycling business network.

Kyoei Steel’s chairman Akihiko Takashima said at press conference on Wednesday domestic electric furnace steel makers should consolidate more while the industry already reduce the debt burden and excess workforce in past years.