Oji Paper Co. said Tuesday it will integrate groupwide production and sale of liners and corrugated mediums under its wholly owned subsidiary Oji Paperboard Co.
The integration is aimed at improving competitiveness through cost reductions and through effective allocation of management resources and will be carried out in three stages, Japan's largest paper mill said.
In the first stage, Oji Paper will convert four affiliates into wholly owned subsidiaries: Takasaki Kosan Co., Chuo Paperboard Co. and Hokuyo Paper Co. -- all producers of liners and corrugated mediums -- and ORI Co., which holds Chuo's assets. The conversion will be made through stock exchanges on April 1, next year.
Shares in the four affiliates will be changed for Oji Paper shares at a ratio of one Oji Paper share for 0.11 Takasaki Kosan share, 0.16 Chuo Paperboard share, four Hokuyo shares and 6,000 ORI shares. In other words, nine Takasaki Kosan shares will be needed to get one Oji Paper share while a holder of one Hokuyo share will receive FOUR?/0.25? Oji Paper shares.
Following the share exchange, Oji Paper will spin off its liner and corrugated medium production division and transfer it to Oji Paperboard in early October.
In the third stage, which will also take place in October, Oji Paperboard, Takasaki Kosan, Chuo Paperboard and Hokuyo will set up local production units.
The four companies and ORI will merge at the same time, but Oji Paperboard, designated to be the surviving entity of the merger, will become the holding company for the new production units.