Minister of Economy, Trade and Industry Toshihiro Nikai told steelmakers Tuesday to be aware of the global reorganization taking place in the industry after Sunday's decision by Arcelor SA of Luxembourg to accept a takeover bid from Mittal Steel Co. of the Netherlands.
"From now on, Japanese companies have to make due preparations with awareness that global realignment will be rampant in the industry," Nikai said at a news conference.
The merger of the world's two largest steelmakers will create an entity with combined annual steel production of more than 100 million tons, surpassing Japan's overall output. They will account for about 10 percent of the global steel market.
Fujio Mitarai, chairman of the Japan Business Federation (Nippon Keidanren), has welcomed the merger and said the new giant doesn't necessarily mean fierce competition for Japanese firms good at producing value-added items.
However, the head of the powerful business lobby also said Japanese steel companies could soon become the targets of cross-border mergers and acquisitions. He suggested the companies introduce defensive measures similar to those adopted by enterprises in the U.S.