Mitsubishi Materials Corporation ("MMC", President: Akira Takeuchi, Capital: 119.4 billion yen) today concluded a share sale and purchase agreement with regard to the acquisition of the Special Products Division of the Luvata Group, a copper products manufacturer based in the United Kingdom ("Luvata SP"). This division specializes in the manufacture and sale of processed copper products.
The Metals Company division of MMC operates in four segments: mining, smelting and refining, copper processing, and precious metals, offering a vertical value-chain from upstream to downstream operations. In the copper processing business, one of these downstream operations, MMC aims to achieve industry-leading profitability, pursuant to its long-term management policy. As one of the world's top processed copper products manufacturers, MMC, together with its consolidated subsidiary, Mitsubishi Shindoh Co., Ltd., has worked to leverage the strength of its copper processing business in copper alloy and materials technology in order to further expand its product range in the automobile and semiconductor sectors as well as to increase sales to volume zone emerging markets.
While MMC has focused primarily on developing its copper processing business in Japan and Southeast Asia, with the rapid globalization of clients' operations and intensifying competition with emerging market players, MMC is keenly aware that establishing a global production and sales footprint for the copper processing business as well as expanding its business portfolio into growth areas of the metals business are critical to achieve further growth and improve profitability.
Luvata SP has a global production and sales network mainly covering 14 facilities and support offices in 9 countries, including the Americas and Europe, and high-quality solution capabilities for clients. With its customer-oriented corporate culture and unique cost-effective manufacturing technology, Luvata SP is one of the world's leading copper processing businesses. In addition, Luvata SP offers various products globally in growth areas ranging from welding electrodes for the automotive industry to superconducting wires and cables used in magnetic resonance imaging (MRI) scanners and other medical equipment. Luvata SP's business is complementary to MMC, and MMC expects that the combination of MMC and Luvata SP will bring synergies in terms of regional footprint, product line-up and technologies. The share sale and purchase agreement was concluded based on the judgment that the acquisition of Luvata SP will enable the further development and growth of MMC's copper processing business. Through the acquisition of Luvata SP, as well as the realization of synergies related to its business platform and customer base, MMC aims to achieve further growth by accelerating the global expansion of its copper processing business and the establishment of a highly profitable business structure.
This transaction is expected to complete in the period from the fourth quarter of the fiscal year ending March 31, 2017, to the first quarter of the fiscal year ending March 31, 2018. The impact of this transaction on MMC's full-year consolidated financial results for the fiscal year ending March 31, 2017 is expected to be minimal.
※ Luvata Group fiscal accounting period is January-December.
Note that earnings forecasts and other forward-looking statements herein reflect judgments by MMC management based on information available as of today. There are many risk factors and uncertainties inherent in such projections, and there may be cases in which actual results differ materially from projections in this document.