March 5, 2021
Kobe Steel, Ltd.
Kobe Steel, Ltd. announces that, at the Board of Directors meeting held today, it has resolved to succeed its standard compressor business*) to Kobelco Compressors Corporation, a Kobe Steel’s wholly owned subsidiary whose main business is the sale of standard compressors, through a simplified absorption-type company split.
As this company split is a simplified absorption-type company split in which a Kobe Steel’s wholly owned subsidiary will be the successor company, some disclosure items and details are omitted. Any matters not determined at this point will be announced as soon as they are determined.
*) Standard compressors are mainly small and medium-sized air compressors used in pneumatic tools or manufacturing lines for machinery products, excluding large process gas compressors used in the oil and gas industries and relevant fields.
In addition, Kobe Steel has concluded a basic agreement on capital and business alliance concerning the standard compressor business with Miura Co., Ltd. In this capital and business alliance, it is assumed that Miura will acquire 49% of the shares of Kobelco Compressors after the absorption-type company split comes into effect, and Kobelco Compressors will thereby become a joint venture of Kobe Steel and Miura. For details of the capital and business alliance, please refer to the Announcement on Conclusion of Basic Agreement on Capital and Business Alliance between Kobe Steel and Miura Involving Miura's Acquisition of Kobelco Compressors' Shares to Form a Joint Venture announced by Kobe Steel and Miura today.
The standard compressor business has been conducted by Kobe Steel, which undertakes product development and manufacture as well as overseas sales and after-sales service, and by Kobelco Compressors, which carries out domestic sales and after-sales service in Japan. In this structure, our Group's standard compressor business has achieved steady growth, gaining a large share of the domestic and Asian markets.
In Japan, we have given top priority to providing a reliable service network across the country and have responded to customer needs mainly through Kobelco Compressors. The standard compressor business comprises utility equipment that supports the production of various industries, such as air compressors, heat pumps, and refrigeration compressors. In this field of business, we are required to respond to changes in the global IoT (the Internet of Things) environment and take more environmentally friendly approach while ensuring stable operation. Recognizing that it is essential to continue to respond to changes in the social environment and offer solutions to customer needs for the sustainable growth of the business, we have been studying a new framework that can promptly respond to changes in customer needs in all aspects of product development, production, sales and service.
As a result, we came to the conclusion that the manufacturing and sales divisions need to work together to speed up decision-making and information transmission as well as to improve business efficiency, thereby enhancing the competitiveness of the business, and we have decided to implement the absorption-type company split today. Through the absorption-type split, we believe it is possible to share customer needs from upstream to downstream in the standard compressor business and to develop products and provide after-sales service with higher added value.
Kobe Steel considers this absorption-type company split to be an important step for Kobelco Compressors to further grow as an Asian leading compressor manufacturer by further strengthening their business in Japan and accelerating business development in the global market including China. The absorption-type company split is part of the process to make Kobelco Compressors stronger as a joint venture between Kobe Steel and Miura. To this end, we will move forward with necessary procedures while making contributions to creating a green society toward carbon neutrality by providing efficient utilities that reduce CO2 emissions and meet customer needs. The KOBELCO Group has always strived to and will continue to provide solutions to the needs of society by making the best use of the talents of our employees and our technologies with a view to realizing a world in which people, now and in the future, can fulfill their hopes and dreams while enjoying safe, secure, and prosperous lives.
|Approval of the company split agreement at the Board of Directors’ meeting||May 2021 (planned)|
|Date of signing of the company split agreement||May 2021 (planned)|
|Effective date of the company split||July 1, 2021 (planned)|
Note: This company split will be implemented without obtaining the approval of the general meeting of shareholders concerning the conclusion of agreements on absorption-type company split in Kobe Steel pursuant to the provision of simplified absorption-type company split prescribed in Article 784, Paragraph 2 of the Companies Act.
An absorption-type company split will be undertaken with Kobe Steel as the splitting company and Kobelco Compressors as the successor company.
The details of the allocation for the absorption-type company split have not been determined at this point and will be announced as soon as they are determined.
There will be no increase or decrease in capital stock due to the absorption-type company split.
Kobe Steel will succeed its rights and obligations in relation to the standard compressor business to Kobelco Compressors to the extent specified in the absorption-type company split agreement to be concluded between Kobe Steel and Kobelco Compressors.
Detailed financial obligations to be assumed by Kobelco Compressors will be announced as soon as they are determined.
|Splitting Company (as of March 5, 2021)||Successor company (as of March 5, 2021)|
|(1) Company Name||Kobe Steel, Ltd.||Kobelco Compressors Corporation|
|(2) Location||2-4, Wakinohama-Kaigandori 2-chome, Chuo-ku, Kobe, Hyogo, Japan||6-4, Osaki 1-chome, Shinagawa, Tokyo, Japan|
|(3) Representative||Mitsugu Yamaguchi
President, CEO and Representative Director
President and Representative Director
|(4) Description of Business||
||Sale and service of compressors, compressor parts and peripheral equipment|
|(5) Capital||250,930 million yen||450 million yen|
|(6) Issued shares||364,364,210 shares||12,000 shares|
|(7) Established||June 28, 1911||July 1, 1997|
|(8) Accounting period||Ends March 31||Ends March 31|
|(9) Principal shareholders & shareholding ratio (as of September 30, 2020)||The Master Trust Bank of Japan, Ltd. (Trust Account)||5.97%||Kobe Steel, Ltd.||100.0％|
|Custody Bank of Japan, Ltd. (Trust Account)||3.18%|
|Nippon Steel Corporation||2.95%|
|Nippon Life Insurance Company||2.78%|
|Custody Bank of Japan, Ltd. (Trust Account 5)||2.07%|
|Goldman Sachs & Co. Reg (Standing Proxy: Goldman Sachs Japan Co., Ltd.)||1.47%|
|Custody Bank of Japan, Ltd. (Trust Account 9)||1.38%|
|JP Morgan Chase Bank 385781 (Standing proxy: Mizuho Bank, Ltd., Settlement & Clearing Services Division)||1.31%|
|The DFA International Small Cap Value Portfolio (Standing proxy: Citibank, N.A., Tokyo Branch)||1.24%|
|(10) Consolidated Financial Position and Operating Results of the Splitting Company for the Latest Fiscal Year|
|Net assets||716,369 million yen||2,408 million yen|
|Total assets||2,411,191 million yen||12,364 million yen|
|Net assets per share||1,811.10 yen||200,699.58 yen|
|Net sales||1,869,835 million yen||19,220 million yen|
|Operating income||9,863 million yen||846 million yen|
|Ordinary income (loss)||(8,079 million yen)||946 million yen|
|Net income (loss) attributable to owners of the parent||(68,008 million yen)||－|
|Net income (loss) per share||(187.55 yen)||－|
Standard compressor business
|Operating results of the
business to be split (a)
results of Kobe Steel (b)
|Net sales||30,675 million yen||1,869,835 million yen||1.6%|
The details of the rights and obligations to be succeeded to Kobelco Compressors will be announced as soon as they are determined.
As a result of the absorption-type company split, there will be no changes to Kobe steel’s company's name, location, title and name of the representative person, business description (excluding the businesses subject to this absorption-type company split), capital, or accounting period.
With regard to Kobelco Compressors, any matters not determined as of March 5, 2021, concerning the changes to the name, location, title and name of the representative person, business description, capital, and accounting period as a result of the absorption-type company split, are scheduled to be determined by the day before the effective date of the absorption-type company split.
The absorption-type company split is anticipated to have an insignificant impact on Kobe Steel’s consolidated business results.
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