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Nippon Steel & Nippon Steel Nisshin Co to Implement Merger

Steel News - Published on Fri, 04 Oct 2019

Image Source: asia.nikkei.com
Nippon Steel Corporation and Nippon Steel Nisshin Co Ltd resolved, at their meeting of the Board of Directors, to implement a merger between NSC and its wholly owned subsidiary NSN, in which NSC will be the surviving company and NSN will be the absorbed company, effective as of April 1, 2020. NSC made NSN into its subsidiary in March 2017, and has strived to maximize the effects of synergies by mutually utilizing management resources of both companies, while making the most of the strengths of each company, and has consistently achieved results in areas such as sales alliances, mutually flexible production, and developments of best practices in technology. In January 2019, NSC converted NSN into its wholly owned subsidiary, thereby establishing a structure oriented toward integrated operations that allow for swifter and more flexible responses in implementing intercompany measures, including those for pursuit of an optimized production system and business restructuring of group companies, in order to realize even greater synergies.

In the current fiscal year, however, the environment surrounding the steel making industry is rapidly deteriorating. In addition to a significant deterioration in NSC’s own business conditions, NSN, which is in the same industry as NSC (blast furnace steelmaking and steel sheet business), is likewise experiencing very harsh business conditions. In order to overcome this situation, it is necessary for the Nippon Steel Group to proceed with the urgent consideration and implementation of measures to pursue even greater total optimization.

Furthermore, in the context of a series of accidents and emergencies that have occurred at NSN since last year, an even greater level of integrated operations with NSC is becoming necessary from the perspectives of maintaining customer relationships and securing stable supply of products. Taking these circumstances into account, after consideration by both companies, the decision has been made to merge, forming an organizational structure for agile response aimed at strengthening competitiveness.

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Posted By : Rabi Wangkhem on Fri, 04 Oct 2019
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