On December 14, the Japan Fair Trade Commission has announced its conditional approval of the planned merger between Nippon Steel Corp. and Sumitomo Metal Industries, Japan's first- and third-largest steel producers respectively.
The Japanese antimonopoly watchdog, which assessed the merger application the two companies submitted at the end of May this year, said the firms can merge on condition they take measures to prevent their domestic market share in the fields of non-grain-oriented electrical steel sheets and high-pressure gas pipe engineering from expanding to an illegal degree.
The total output capacity of the two companies reached 47.89 million mt in 2010, surpassed only by Luxembourg-headquartered steel giant ArcelorMittal.
The new company, Nippon Steel & Sumitomo Metal Corp., which is due to be officially launched on October 1 next year with a ratio of 0.735 Nippon Steel shares to one Sumitomo Metal share, "will aim to achieve 60 to 70 million tons in terms of global production capacity by further accelerating its overseas business development," the two firms said in September.