Kobe Steel Ltd. will convert Nippon Koshuha Steel Co. into a subsidiary later this month by increasing its equity stake in the affiliated specialty steel producer to 51 percent from the current 30.6 percent, the two companies announced Thursday.
Kobe Steel will buy 43.2 million new shares to be issued by Nippon Koshuha through private placement, with payment of 3.89 billion yen scheduled for April 25.
Bearing steel is the principal product of Nippon Koshuha, which is listed on the First Section of the Tokyo Stock Exchange, as is Kobe Steel
Bearing steel is used in ball bearing applications in machinery.
Nippon Koshuha has been facing financial strains over the past several years due to stagnant economic activity and increasing competition. To turn the situation around and expand the specialty steel business of the Kobe Steel group, the two companies decided that Nippon Koshuha should become a Kobe Steel subsidiary so as to rationalize the production and marketing of bearing steel.
Starting in July, the marketing of bearing steel will be unified through Kobe Steel, which will take on Nippon Koshuha’s bearing steel sales staff.
NKK, Kawasaki tieup
NKK Corp. and Kawasaki Steel Corp. said Thursday they have agreed to consider cooperating in rationalizing operations at their steel mills, which are located near each other.
The two major steel makers said they will study collaboration in product distribution, facility repair, and the purchase and storage of materials.
The agreement is a virtual tieup between NKK and Kawasaki Steel, industry officials said.
An agreement would affect NKK’s plants in Kawasaki, Kanagawa Prefecture, and Fukuyama, Hiroshima Prefecture, and Kawasaki Steel’s plants in Chiba, Chiba Prefecture, and Kurashiki, Okayama Prefecture.