ITOCHU Announces Conclusion of Basic Agreement for Succession to Steel Raw Materials Business
August 3, 2015
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that a basic agreement has been concluded today between its consolidated subsidiary ITOCHU Metals Corporation (headquartered in Minato-ku, Tokyo; Masaki Oka, President & CEO; hereinafter “ITOCHU METALS”) and Sumisho Tekko Hanbai Co., Ltd. (headquartered in Chuo-ku, Tokyo; Kiyotaka Kawasaki, President & CEO; hereinafter “SUMISHO TEKKO HANBAI”) in which ITOCHU METALS will take over SUMISHO TEKKO HANBAI’s steel raw materials business (trading business of steel scrap as a major product) through an absorption-type company demerger. Subject to licensing and approval procedures, it is planned to execute the transfer of the business on January 1, 2016.
Conclusion of basic agreement background and purpose
ITOCHU METALS took over the steel raw materials business (steel scrap trade, general recycling business) from ITOCHU in April 2008, since which time it has developed the scale of the business.
Seeking means to expand and develop further, initial approaches by SUMISHO TEKKO HANBAI led to ongoing considerations and negotiations.
In view of the outstanding scale and performance of the targeted business in the Kansai region in particular, its strong complementarity with the existing business of ITOCHU METALS, and the fact that employees with a wealth of experience in the steel scrap industry, including Tokyo, would be transferred at the same time, it was considered that the succession would contribute significantly not only to the expansion of the targeted business but also to the future development of ITOCHU METALS as a whole.
At the same time, looking into ways of reorganizing its building materials and steel raw materials business, SUMISHO TEKKO HANBAI considered that the transfer of its steel raw materials business to ITOCHU METALS would enable it to reorganize its building materials business, and further develop and reinforce the competitiveness of the steel raw materials business.
Moving forward, the two companies, with the understanding and cooperation of their business partners, will fully execute the succession of the business, working to further expand the steel raw materials business as well as to accelerate the development of the general recycling business.
Overview of succession business
Entire steel raw materials business operated by SUMISHO TEKKO HANBAI,
and related assets
|Business locations||Tokyo, Osaka|
Profile of transferring company
|Trade name||Sumisho Tekko Hanbai Co., Ltd.|
|Location||1-8-12 Harumi, Chuo-ku, Tokyo|
|Nature of business||Trade in steel raw materials, steel building materials, etc., and related business|
|Capital||400 million yen|
|Date of establishment||April 1981|
|Shareholders||Sumitomo Corporation 100％|
Profile of receiving company
|Trade name||ITOCHU Metals Corporation|
|Location||2-5-1 Kita-Aoyama, Minato-ku, Tokyo|
|Nature of business||Trade in non-ferrous raw materials, products, steel scrap, etc., general recycling business and related business|
|Capital||700 million yen|
|Date of establishment||June 1996|
|Shareholders||ITOCHU Corporation 100％|
The handover of the targeted business will be concluded by December 31, 2015, and ITOCHU METALS will assume control from January 1, 2016.