Japan-based Sumitomo Metal Industries, Ltd. (Sumitomo Metals) and Sumitomo Corporation (Sumitomo Corp.) have announced the signing of a stock purchasing agreement.
Under the terms of the agreement, Sumitomo Corp. will invest Yen 10 billion ($94 million) in the integrated high-grade seamless pipe joint venture in Brazil called Vallourec & Sumitomo Tubos do Brasil Ltda. between Sumitomo Metals and the French-based Vallourec Group. In the Brazilian JV, Vallourec Group has a 56 percent stake; Sumitomo Metals has approximately 39 percent, whereas Sumitomo Corp. holds about 5 percent.
In addition, to further boost ties between Sumitomo Metals and Sumitomo Corp., Sumitomo Corp. has agreed to purchase Yen 49.6 billion ($465 million) worth of Sumitomo Metals' treasury stock via a third-party allotment, while Sumitomo Metals will purchase Yen 15 billion ($140 million) worth of Sumitomo Corp. stock.
The stock purchasing agreement in question will allow Sumitomo Metals to strengthen Sumitomo Corp.'s strong overseas networks and deepen the cooperation between the two in growth markets. It is also expected to boost the marketability of Sumitomo Metals' seamless products.