Nippon Steel & Sumitomo Metal Corp., Japan's largest steel maker, said it will take majority control of the nation's No. 4 mill, Nisshin Steel Co., as the industry consolidates in the face of a global supply glut.
Citing a "rapid deterioration of the business environment" due to overcapacity in China, Nippon Steel will take a 51 percent stake in Nisshin via a combination of a tender offer and the sale of new shares by the smaller company, according to a statement released Friday by the two firms. Nippon Steel will only take up the new shares in Nisshin if its tender offer fails to win it majority control, the statement said.
Nisshin has a market value of ¥159.5 billion while Nippon Steel, also the world's most valuable steel maker, is valued at around ¥2.1 trillion.