(Recasts with announcement by both companies)
TOKYO May 13 Japan's Mitsubishi Chemical
Holdings Corp said on Tuesday it would buy a majority
stake in industrial gas provider Taiyo Nippon Sanso for
more than 100 billion yen ($980 million) to provide nitrogen and
other gases for its overseas production facilities.
Japan's biggest chemical company said it is seeking to
increase its stake in Taiyo Nippon to up to 51 percent from 27
percent and is offering 1,030 yen per share, a 16 percent
premium to Taiyo Nippon's closing price on Tuesday.
In a joint statement, Taiyo Nippon said it would agree to
The takeover will help consolidate Mitsubishi Chemical's
position in the U.S. petrochemicals sector, which is flourishing
thanks to an abundance of cheap gas from shale formations.
Japanese chemicals makers are expanding overseas to counter a
shrinking domestic market shrinks as the population declines.
Mitsubishi Chemical, which raised its interest in Taiyo
Nippon to 27 percent from 15 percent in October, said it will
mount a tender offer in early November to increase its stake to
after clearing necessary procedures of global competition laws.
Mitsubishi Chemical has been expanding through acquisitions
as it consolidates its domestic businesses, including
withdrawing from styrene monomer operations and scrapping one of
its naphtha crackers.
Taiyo Nippon is a supplier of industrial gases including
nitrogen, which is required in large quantities when producing
chemicals such as ethylene from shale gas. Industrial gases are
used at shale gas extraction sites as well. Taiyo Nippon has
extensive operations in the United States.
Mitsubishi Chemical will supply nitrogen and other gases to
U.S. facilities built in partnership with Dow Chemical
to produce acrylic resin materials, the Nikkei newspaper
The newspaper said Mitsubishi Chemical was planning to
install Taiyo Nippon gas production equipment at U.S. chemical
plants of other companies.
In the statement, Mitsubishi said it and Dow were
considering cooperating, but did not give further details.
JPMorgan Securities Japan advised Mitsubishi Chemical, while
Taiyo Nissan was advised by Mizuho Securities.
($1 = 102.1150 Japanese Yen)
(Reporting by Sneha Banerjee in BANGALORE and Osamu Tsukimori
in TOKYO; Editing by Aaron Sheldrick and Miral Fahmy)