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Apr. 04, 2011
Sumitomo Corporation

Notice Concerning Agreement to Acquire Shares in U.S. Rolled Aluminum Sheet Manufacturer & Supplier

Sumitomo Corporation (Headquartered in Chuo-ku, Tokyo; Susumu Kato, President and CEO; hereinafter "Sumitomo Corp") is pleased to announce that the Consortium which is made up of  Sumitomo Corp and its joint partners,* have agreed with BP Company North America Inc. (Headquartered in Houston, Texas, USA; Steven Bray, President; hereinafter "BP") with respect to the acquisition of 100% of the outstanding shares of ARCO Aluminum, Inc. (Headquartered in Louisville, Kentucky; Patrick Franc, President; hereinafter "ARCO"), a wholly owned subsidiary of BP serving as a manufacturer and supplier of rolled aluminum sheet.

 

*The joint partners (here in after together with Sumitomo corp, collectively "the Partners") are:

  • Sumitomo Light Metal Industries, Ltd. (Headquartered in Minato-ku, Tokyo; Shigenori Yamauchi, President; hereinafter "SLM")
  • Furukawa-Sky Aluminum Corp. (Headquartered in Chiyoda-ku, Tokyo; Masateru Yoshihara, President & CEO; hereinafter "Furukawa-Sky")
  • ITOCHU Corporation (Headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter "ITOCHU"); and
  • ITOCHU Metals Corporation (Headquartered in Minato-ku, Tokyo; Masaki Oka, President & CEO; hereinafter "IMC").

 

1. Rationale and Details for the Acquisition of Shares
ARCO owns an approximate 45% interest in the aggregate assets in an aluminum rolling mill in Logan County, Kentucky (hereinafter, "Logan Mill") that supplies aluminum sheet to beverage can makers and also owns a 60 percent stake in Logan Aluminum Inc. (Headquartered in Russellville, Kentucky, USA; Randy Schumaker, President; hereinafter "Logan"), the operator of Logan Mill.  The other owner of interests in Logan and Logan Mill is Novelis Corporation (Headquartered in Atlanta, Georgia, USA; Philip Martens, President & CEO).  Each of ARCO and Novelis supplies its own primary metal inputs to Logan Mill for processing and owns and markets its own share of output.  ARCO and Novelis are parties to a series of joint venture agreements governing Logan and Logan Mill.
 Based on the joint acquisition of all shares in ARCO from BP at a cost of US$ 680 million, Sumitomo Corp intends to enhance production and distribution of aluminum can materials in North America, the largest market in the world, through participation in management of ARCO and marketing support to ARCO. In addition, Sumitomo Corp also envisages a plan to expand its business volume in Latin America, a promising market with great growth potential.
 As for the management and control of ARCO, the Partners have set up a special purpose vehicle in the U.S. owning a whole stake in ARCO. This vehicle will urge the Partners to make important decisions through consultation.

 

The Joint Partners

Sumitomo Corp determined to participate in the deal jointly with SLM, Furukawa-Sky, ITOCHU and IMC instead of taking independent action in consideration of the scale of participation in the management of the North American manufacturer, which has world-class rolled aluminum sheet manufacturing facilities. On that basis, Sumitomo Corp will promote business activities so as to secure a presence in the North American and Latin American markets and accordingly to enhance the influential power in the global market.
The shares will be subscribed by the Partners with the following ownership ratio:
Sumitomo Corp: 20%; SLM: 40%; Furukawa-Sky: 35%; ITOCHU: 2% and IMC: 3%

 

2. Profile of ARCO Aluminum Inc.
Company Name  : ARCO Aluminum Inc.
Establishment    : 1984
Headquarters Address:

                          9960 Corporate Campus Drive, Suite 3000, Louisville, Kentucky 40223
Registered Capital: US$1,000
Representative     : President - Patrick Franc
Main Business     : Manufacturing and distribution of aluminum products
Annual Turnover   : Approximately US$900million (in 2010);
Annual Sales Volume: Approximately 300,000tons (in 2010)
Number of Employees: 32(as of March 2011)
Relationship with Sumitomo Corp:

There is no capital, personal and business relationship to note between ARCO and Sumitomo Corp.

 

3. Profile of BP Company North America Inc.
Company Name:BP Company North America Inc.
Establishment  : 1985
Headquarters Address: 501 WestLake Park Blvd., Houston, Texas 77079
Registered Capital: US$10,660
Representative  : President - Steven Bray
Main Business  : Exploration and production of oil and gas

 

4. Profile of Logan Aluminum Inc.
Company Name : Logan Aluminum Inc.
Establishment   :1984
Headquarters Address:  U.S. Hwy. 431, Russellville, Kentucky 40232
Registered Capital: US$1
Representative   : President - Randy Schumaker
Main Business   : Manufacturing and distribution of aluminum products
Number of Employees:  Approximately 1,000

 

5. Profile of joint holding company
Company Name:   ARROW Aluminum Holding Inc.
Headquarters Address:  Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
Registered Capital:        US$5,000
Representative:      Co-President -
Shigekazu Shiraishi (Director of SLM),
Takayoshi Nakano (Director of Furukawa-Sky), and
Masao Sekiuchi (Executive Officer of Sumitomo Corp)
Main Business:            Holding equity of ARCO Aluminum Inc.

 

6. Schedule
 Between July and September 2011: Closing of the Share Acquisition (planned)
Note, however, that the closing date is subject to change depending on circumstances, such as the approval by competition authorities.

 

7. Impact on the Business Results of Sumitomo Corp
As for the impact on business results for the fiscal year ending March 31, 2012, Sumitomo Corp will disclose details upon clarification of the impact pursuant to the TSE Timely Disclosure Rules.

 

Note: This transaction was conducted with financial advices from "Morgan Joseph TriArtisan Capital, LLC" in New York.

 

<Additional Information>

Notice Concerning Agreement to Acquire Shares in U.S. Rolled Aluminum Sheet Manufacturer & Supplier (868KB/PDF) 

 

Inquiries

Corporate Communications Department,
Sumitomo Corporation

TEL:+81-3-5166-3100News Release Contact Form

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