Nisshin Steel, Nippon Metal Surge in Tokyo After Merger Report
Nisshin Steel Co., Japan’s third- largest stainless steel maker, and Nippon Metal Industry Co. surged in Tokyo trading after Japan Metal Bulletin reported that they are merging to compete with global rivals.
Shares of Nisshin Steel rose 5.2 percent to 162 yen as of the 11 a.m. trading break on the Tokyo Stock Exchange, the biggest gain since May 31. Nippon Metal Industry gained 13 percent to 105 yen, the most since March 16.
Nothing has been decided on the reported merger, Nisshin Steel said today in a statement in response to the Japan Metal Bulletin report that the companies may make announcement on a merger soon. Nippon Metal Industries isn’t in talks with Nisshin Steel to combine operations, Isao Fujiwara, deputy manager at the company’s corporate planning department, said by telephone today, denying the report.
Nisshin Steel is the largest shareholder of Nippon Metal, holding a 5.12 percent stake as of March 31, according to data compiled by Bloomberg.
The proposed merger of Nippon Steel Corp. (5401) and Sumitomo Metal Industries Ltd. (5405) this year has fueled speculation of an industry consolidation. Japan’s biggest and third-largest steelmakers, respectively, plan to combine by October 2012 to create the world’s second-largest producer of the metal after losing market share to Chinese and South Korean rivals.
Japanese stainless steel makers must consolidate to beat global competition, Nisshin Steel Chairman Hideo Suzuki said in February.
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