May. 16, 2006
Showa Denko K.K.
Sumitomo Corporation and Showa Denko to Integrate Their Aluminum Alloy Operations
Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President: Motoyuki Oka) and Showa Denko K.K. (Head Office: Minato-ku, Tokyo; President: Kyohei Takahashi) concluded a basic agreement today to integrate their aluminum alloy operations. The agreement calls for Summit Aluminum Ltd. (Head Office: Yodogawa-ku, Osaka; President: Masaru Aoyagi), a Sumitomo subsidiary 98.63% owned by the trading company, to take over the business of Showa Aluminum Alloy K.K. (Head Office: Ichihara City, Chiba Prefecture; President: Yasuaki Kamei), a wholly-owned subsidiary of Showa Denko, in July 2006 at the earliest. Under the business integration, Summit Aluminum will issue new shares for a third-party allocation to Showa Denko.
The new company to be created after the planned business integration will be called Summit Showa Aluminum Ltd., of which Sumitomo will own a 65.76% equity stake, Showa Denko 33.33% and individual investors the remaining 0.91%. The new company will be headed by Masaru Aoyagi, President of Summit Aluminum, who had previously worked at Sumitomo. Following the business integration, Showa Aluminum Alloy will be dissolved.
Aluminum alloys are mainly used for casting and die casting products that are used by the auto parts, construction material and electric appliance industries. Combined annual sales of the two companies to be integrated total about ¥40 billion, or 180,000 tons in production and sales volume, the second largest share of the domestic aluminum alloy market.
Sumitomo and Showa Denko consider that the business integration will enable them to meet diversifying customer needs, reduce operating costs and expand earnings by reinforcing marketing power and streamlining their manufacturing activities.
Outline of Integrated Company
Summit Showa Aluminum Ltd.
Representative Director and President: Masaru Aoyagi
Location of Head Office: Nishi Nakajima 1-11-16, Yodogawa-ku, Osaka City, Osaka
Location of Factories: Ibaraki, Aichi, Shiga, Chiba
Capital: ¥775 million (planned)
No. of Employees: about 220