TOKYO: Nippon Steel & Sumitomo Metal Corp and Kobe Steel Ltd said on Wednesday they will reduce stakes in each other to raise funds for expansion overseas and for improving competitiveness.
The companies built up equity stakes in each other as part of alliances to share resources for production, a common arrangement even among competitors in Japan.
Nippon Steel and Kobe Steel’s respective stakes in each other had increased after Nippon Steel merged with Sumitomo Metal Industries in 2012.
Nippon Steel, Japan’s top steelmaker, said in a statement it will sell Kobe Steel shares valued at about 22 billion yen ($184 million) at Wednesday’s closing price. The sale will halve its stake in Kobe Steel, the No.3 steelmaker, to a little below 3 per cent.
Kobe Steel said in a statement it will sell shares in Nippon Steel valued at about 21.5 billion yen, halving its stake to around 0.7 per cent.
“The cooperative relationship between our two companies shall remain unchanged,” Nippon Steel said. Kobe Steel said the same in its statement.
