ArcelorMittal – Nippon Steel merger Convergence benefits
The government has approved the merger of ArcelorMittal and Nippon Steel. It is good news for both companies as well as their employees.
Introduction
Recently, the government approved the merger of the world’s largest steelmaker, ArcelorMittal, with the second-largest steel producer in Japan, Nippon Steel. The proposal for the merger came 15 months after its approval by the Competition Commission of India (CCI). Per the proposal, ArcelorMittal will own 50% of the ArcelorMittal Nippon Steel India (AM/NS) entity, while Japanese company Nippon Steel & Sumitomo Metal Corporation will have a stake of 35.6%.ArcelorMittal, the world’s largest steelmaker, and Nippon Steel Corp. are merging to create the world’s biggest steelmaker by output capacity. According to estimates from both companies, the combined entity will have about $77 billion in sales this year. The deal is expected to close on April 1 and will make a company with an annual crude steel output capacity of 120 million tons.
The union of steel giants ArcelorMittal and Japan’s Nippon Steel Corp. is expected to close on April 1, creating the world’s biggest steelmaker.
In a joint statement, the companies said they intend to form a new company that will be listed on the New York Stock Exchange under the name ArcelorMittal Nippon Steel & Sumitomo Metal Corporation (AMS). The combined company is expected to have annual sales of about $100 billion and overtake Luxembourg-based ArcelorMittal as the world’s largest steel producer by volume.
More about ArcelorMittal
ArcelorMittal, based in Luxembourg, said it would acquire Nippon Steel for $5.3 billion to boost its capacity for making steel for the auto industry. The combined company wants to tap into the demand for electric vehicles and new battery materials.
The deal would create a global steel giant with an annual production of about 30 million metric tons of raw steel and 26 million metric tons of flat-rolled products like sheets and beams, as well as carbon black paste and cladding materials used in construction projects such as skyscrapers.ArcelorMittal is one of the largest steel producers in the world, with annual crude steel production in 2019 of 67.2 million tons. The merger will also change ArcelorMittal’s management structure, with chairman and CEO LN Mittal retiring due to age-related reasons.
According to an official statement, ArcelorMittal is the largest steelmaker in the world, with annual crude steel production in 2019 of 67.2 million tons.
ArcelorMittal is the world’s largest steelmaker, with a global annual crude steel production 2019 of 67.2 million tons.
It operates in 60 countries and produces steel in 19 countries, including Germany, France, Belgium, China, and India.
The deal comes as the global auto industry struggles amid the coronavirus pandemic and a shift in consumer preferences from traditional sedans to SUVs and pickups.
According to their joint statement, ArcelorMittal and Nippon Steel are merging to create a “world-class” steel manufacturer. The deal comes as the global auto industry struggles amid the coronavirus pandemic and a shift in consumer preferences from traditional sedans to SUVs and pickups.
ArcelorMittal – Nippon Steel merger
Recently the government approved the merger of the world’s largest steelmaker, ArcelorMittal, with the second-largest steel producer in Japan, Nippon Steel. The transaction will create a new entity named ArcelorMittal Nippon Steel Company Limited (“Nippon”).
Both boards have approved a lot of directors of both companies, and shareholders have also supported it. Per this agreement’s terms, ArcelorMittal owns a 67% stake, while Nippon holds a 33% stake in this newly formed company, which is expected to generate $18 billion in revenue by 2025 from sales across various segments, including automotive/non-automotive parts, etc.
ArcelorMittal, a steel producer, and Nippon Steel Corp., an iron ore miner, and steelmaker, said Tuesday they had agreed to merge in a deal worth $37 billion.
The deal will boost sales by more than 25% to $77 billion this year, with roughly half from the automotive industry, according to company estimates. The two companies expect their combined sales in 2023 would be nearly $100 billion annually.
The combined company wants to tap into the demand for electric vehicles and new battery materials. The two companies say they will join forces to create an enterprise with annual revenues of $10 billion within six years, making it one of the largest integrated steelmakers in Europe.
The merged entity will have an annual crude steel output capacity of 120 million tons.
ArcelorMittal and Nippon Steel Corp. are the world’s largest steelmakers, with combined production of around 100 million tons annually.
The merged entity will have an annual crude steel output capacity of 120 million tons, which makes it one of the top five producers in the world. The new company also plans to invest $2 billion over three years for new projects that include upgrading existing facilities or constructing new ones at locations where demand is increasing rapidly due to strong economic growth in the Asia Pacific region where it has been operating for decades now.”
The two companies will maintain their identities as brands but operate as one. The new company will have an annual revenue of $100 billion and employ more than 100000 people worldwide.
As per the proposal, ArcelorMittal will own 50% of the ArcelorMittal Nippon Steel India (AM/NS) entity, while Japanese company Nippon Steel & Sumitomo Metal Corporation will have a stake of 35.6%.
The remaining 10% would be owned by the promoters of AM/NS, along with their other subsidiaries. The merger will create an integrated steel business with a capacity of more than 100 million tonnes per annum and revenues of over $50 billion by 2023.
Nippon Steel & Sumitomo Metal Corporation
Nippon Steel & Sumitomo Metal Corporation is a Japanese multinational conglomerate headquartered in Tokyo, Japan. Its main business segments include steelmaking and iron ore, coal, and cement distribution. The company also provides technology services such as equipment supply and service (ES), engineering (ENG), mechanical equipment design/development (D&D), and product development services for the automotive industry.
Nippon Steel & Sumitomo Metal Corporation has joint ventures in China with China Minmetals Corporation Limited, India with JSW Steel Ltd., Romania with ArcelorMittal SA, and Turkey with Türk Tekstil Sanayi ve Ticaret AŞ.
A global leader in automobile steel sheets, high-grade electrical sheets, and stainless steel.
ArcelorMittal, a global leader in steel and iron production, announced today that it has entered into an agreement to merge with Nippon Steel Corporation (NSC). The transaction will bring together two leading steel producers with complementary strengths across the entire value chain.
ArcelorMittal is a fully integrated steelmaker operating globally with business segments including iron and steel business, stainless steel business, and engineering and construction business. Nippon Steel Corporation is one of Japan’s largest producers of high-grade electrical steel sheets.
It is a fully integrated steelmaker operating globally with business segments including iron and steel, stainless steel, and engineering and construction businesses.
ArcelorMittal is a global leader in the steel industry, with operations across Europe, South America, Asia, and Africa. The company’s core business involves manufacturing and selling iron and steel products for the automobile, construction, and home appliances sectors. It also produces specialized high-grade electrical sheeting for manufacturing electronics components such as semiconductors or flat panel displays.
ArcelorMittal has over 100 years of experience in mining raw materials like iron ore (Fe), coal (C), or limestone (CaCO3) at its sites in Europe & North America that are located close to major ports where they can be shipped directly to customers without having to go through customs controls on board ships arriving at these ports.
Its core business involves manufacturing and selling iron and steel products for the automobile, construction, home appliances, and precision machinery industries.
ArcelorMittal is a global leader in the steel industry. Its main business involves manufacturing and selling iron and steel products for the automobile, construction, home appliances, and precision machinery industries. It has joint ventures in China, South Korea (Sooam), the Philippines (Philippine Steel Industries Inc.), Oman and Indonesia.
In addition to its participation in AM/NS India joint venture with ArcelorMittal, it has joint ventures in China (Shanghai Baosteel Nisshin Co., Ltd.), South Korea (NSSC(NSC) USA Corporation), Philippines (Sumitomo Metal Mining Co., Ltd.), Oman (SMS Technical Services Middle East LLC) and Indonesia (PT.Krakatau Nippon Steel Sumikin).
Some more details regarding the merger
The merger will also change ArcelorMittal’s management structure, with chairman and CEO LN Mittal retiring due to age-related reasons. Yannopoulos will replace him as the new CEO of ArcelorMittal.
Yannopoulos joined ArcelorMittal in 2010 as president for Europe, where he oversaw its business development activities across critical markets such as Eastern Europe, Russia, and Turkey. He had also served as vice president for global sales & marketing since September 2013, when he took over from Philippe Fisher, who moved on from his post at General Electric Company (GE) and will have a board comprising eight directors, four each from ArcelorMittal and Nippon.
The merger agreement is expected to be signed on June 30 by the two companies’ respective boards, after which it will be submitted for ratification by shareholders at both ends of the transaction. After this step, there will be an interim period of 60 days, during which shareholders can raise objections against the deal or seek further clarifications before giving their consent or rejecting it at any time within this period.
It has a presence in 60 countries and an automotive steelmaking footprint in 19 countries,
ArcelorMittal is the world’s largest steel producer, with a presence in 60 countries and an automotive steelmaking footprint in 19 countries. It has a recent history of mergers and acquisitions. In the last decade alone, it has acquired more than 40 companies, including:
Corus Steel (2002), United States Steel Corp. (2002), Essar Steel India Limited (2003), Jindal Steel & Power Limited (2007), Vedanta Resources plc., Shri Ram Group
Mittal Steel Ltd.
The company will have operations across seven states, including Jharkhand, West Bengal, Chhattisgarh, Odisha, and Karnataka.
ArcelorMittal is the largest steel producer in the world, with a market share of over 15%. The company will have operations across seven states, including Jharkhand, West Bengal, Chhattisgarh, Odisha, and Karnataka.
The merger will result in significant cost savings for both companies and increase their competitiveness in the global market.
Takeaway:
The government has approved the merger of ArcelorMittal and Nippon Steel. It is good news for both companies and their employees, who would now benefit from the synergies that this merger can bring in terms of improved productivity, cost savings, and higher profits.
The proposed deal will result in an estimated $43 billion in revenue for ArcelorMittal, making it one of the global leaders in steel production. The company has already said it plans to invest $15 billion over five years into upgrading its facilities across Europe and North America; meanwhile, Nippon Steel currently operates two plants located in Japan: one in Koriyama City (partially owned by Hitachi) with an annual capacity of 2 million tons; while another plant located near Osaka city limits produces 1 million tons annually.
After this merger, it would be one of the most significant foreign investments in the country till now.
ArcelorMittal Nippon Steel would be the largest steel company in the world, with an annual capacity of over 50 million tonnes. It will also have a presence in 60 countries and an automotive steelmaking footprint in 19 countries. The merger will change ArcelorMittal’s management structure as it will result in one company having two headquarters: one in Luxembourg, where SNC-Lavalin is based, and another one located in Essen, Germany (home base for ThyssenKrupp).
Conclusion:
The two companies have formed a joint venture in India, which will be the giant steel plant in the world. We are glad to see that foreign companies are investing in India and making it a hub for their operations. This merger will help them expand their production capacity and create jobs. It also shows that India is becoming a global manufacturing hub with its vast population base and increasing demand for steel products globally.
Frequently Asked Questions (FAQs)
1)Is the merger approved by the government?
Yes, this merger is approved by the government.
2)What will be the benefits of merging both companies?
This merger can bring improved productivity, cost savings, and higher profits.
3)Where is ArcelorMittal based?
ArcelorMittal is based in Luxembourg.
