MMC Superalloy Corporation merges with Hitachi Metals, Ltd.

Mitsubishi Materials Corporation (President: Hiroshi Yao; Capital: 119.4 billion yen; hereinafter referred to as “Company”) hereby announces that the board of directors of the Company resolved at its meeting held on January 29, 2014 to conduct a transaction in which Hitachi Metals Ltd. (Chairman, President, Chief Executive Officer: Hiroyuki Fujii; Capital: 26.3 billion yen; hereinafter referred to as “Hitachi Metals”) will acquire shares equivalent to 51% of the issued shares in MMC Superalloy Corporation (hereinafter referred to as “MMC Superalloy”), a consolidated subsidiary of the Company under the jurisdiction of Advanced Materials & Tools Business Company, through (i) the transfer of a portion of shares in MMC Superalloy from the Company to Hitachi Metals and (ii) the issuance of shares for subscription by way of a third party allotment (hereinafter referred to as “Transaction.” Further details are given below).
Please note that, after the Transaction, the Company will remain as a shareholder holding 49% of the issued shares of MMC Superalloy, and that Hitachi Metals and the Company will jointly operate MMC Superalloy.

  1. 1. Purpose of Transaction

    Since the opening of the former Okegawa Plant (Okegawa, Saitama), in 1944, the Company has cultivated technology for the fabrication of nickel alloy and other non-ferrous metal. This technology is unrivaled throughout the world. In 2010, the Company transformed former Okegawa Plant into MMC Superalloy Corporation as the independent entity in order to conduct dynamic management and flexible operation. MMC Superalloy provides highly functional products such as special copper alloys and special heat-resistant, corrosion-resistant and abrasion-resistant alloys to developing nations and other customers throughout the world concentrating on rapidly-changing key industries such as aircraft, industrial gas turbines and automobiles.
    Hitachi Metals conducts global business in the automotive, electronics and industrial infrastructure fields as a manufacturer of highly function products based on materials technology and development capability which meets the needs of the times. The core of Hitachi Metals is a specialty steel business represented by the brand Yasuki Steel. Hitachi Metals is now expanding its high technical capability to the aircraft and energy fields, aiming to achieve growth in these fields over the medium-to-long term.
    Under these circumstances, the Company has reached the decision that, in order to successfully compete against global competition in the aircraft and energy markets, which are expected to experience increasing development on a global scale going forward, and to achieve medium-to-long-term growth, it is essential to combine the abundant track record and technological capabilities of MMC Superalloy in the aircraft materials area, and the strong business foundation which Hitachi Metals has fostered in the specialty steel business over its long years of operation.
    The Company will conduct management of MMC Superalloy jointly with Hitachi Metals. The Company is determined to further strengthen its international competitiveness by expanding its customer base through the provision of new products, services and solutions that are expected by markets and customers.

  2. 2. Future strategy of the Company

    Advanced Materials & Tools Business Company of Mitsubishi Materials provides the world with a variety of products essential to industry, including carbide products such as drills and inserts required for fabrication of parts for automobiles and aircraft, and sintered parts used in engines and transmissions.
    In the future, Advanced Materials & Tools Business Company of Mitsubishi Materials will succeed in global competition through further concentration of management resources in order to capture markets in developing nations, with a focus on automotive demand which is forecasted to grow globally. Furthermore, regarding demand for aircraft held by MMC Superalloy, the Company will increase sales through synergy realized by business expansion from the joint operation with Hitachi Metals.
    Through our medium-term management plan “Materials Premium 2013,” the Company is implementing a growth strategy based on the two principles of "expansion into global markets, particularly markets in developing nations" and “realization of materials premium.” We shall accelerate our growth by continuing to focus on selection and concentration.

  3. 3. Overview of MMC Superalloy
    Head office
    Okegawa, Saitama
    Date of incorporation
    July 1, 2010
    Stated capital
    2,000 million yen
    Net sales
    16,459 million yen (fiscal year ended March 2013)
    Business activities
    Manufacturing and sales of high performance heat resistant alloys, corrosion resistant alloys, abrasion resistant alloys, and special copper alloys.
    Number of employees
    425 (as of March 31, 2013; includes employees of the Company stationed at MMC Superalloy)
    Major shareholders and shareholding ratio
    Mitsubishi Materials Corporation 100%
  4. 4. Timeline
    Execution date of share purchase agreement
    January 29, 2014
    Effective date of transaction
    Pending obtainment of approval in Japan, China and Europe (scheduled for July 1, 2014)