8 January 2015, 00:00
Kobe Steel, Ltd. and Nippon Steel & Sumitomo Metal Corporation (NSSMC) have been promoting the joint utilization of iron and steel sources and other cooperative measures since 2001 under a three-way alliance that began with the former Nippon Steel Corporation and former Sumitomo Metal Industries, Ltd. To carry out the smooth and steady implementation of the measures, the former Nippon Steel, the former Sumitomo Metal Industries and Kobe Steel purchased equity shares in each other. Since then, the three companies have increased their cross-shareholdings to deepen and expand the alliance.
One of the key measures of Kobe Steel’s Fiscal 2013-2015 Medium-Term Business Plan is to improve the company’s financial performance through cash generation. As the merger of the former Nippon Steel and former Sumitomo Metal Industries in October 2012 led to the increase of Kobe Steel’s investment in NSSMC, Kobe Steel has decided to sell half of its shareholdings in NSSMC. By strengthening its financial performance, Kobe Steel will be able to maintain its investment capabilities and allocate more funds to grow its business.
The cooperative relationship between Kobe Steel and NSSMC will remain unchanged after the revision in this shareholding. The two companies will continue to promote cooperative measures to derive mutual benefits.
The shareholding revision is anticipated to have an insignificant effect on Kobe Steel’s business results.