May 17, 2021
Kobe Steel, Ltd.
Kobe Steel, Ltd. announces that it has concluded today an absorption-type company split agreement concerning the absorption-type company split 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 announced in the Announcement on Company Split (Simplified Absorption-Type Split) and Succession of Standard Compressor Business to Wholly Owned Subsidiary as of March 5, 2021.
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.
*) Standard compressors are mainly small and medium-sized air compressors used in pneumatic tools or manufacturing lines for machinery products, not including large process gas compressors used in the oil and gas industries and relevant fields.
Updated information is underlined regarding the matters that had not been determined in the previous announcement dated March 5, 2021.
In addition, Kobe Steel planned to conclude the final contract for the capital and business alliance concerning the standard compressor business with Miura Co., Ltd. in May 2021 as announced in 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 as of March 5, 2021. However, as it is necessary to continue discussions on the detailed adjustment of the terms and conditions of the capital and business alliance, the final contract for the capital and business alliance is expected to be concluded in June or later. Any matter to be disclosed will be promptly notified once it arises. We will continue to aim to start this capital and business alliance in October 2021, as originally planned.
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. On March 5, Kobe Steel decided to implement the absorption-type company split and concluded the company split agreement with Kobelco Compressors 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 17, 2021|
|Date of signing of the company split agreement||May 17, 2021|
|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.
Kobelco Compressors will allocate 36 shares of Kobelco Compressor’s common stock to Kobe Steel in consideration of the absorption-type split.
There will be no increase or decrease in capital stock due to this 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 concluded between Kobe Steel and Kobelco Compressors.
Kobe Steel recognizes that the financial obligations to be borne by Kobelco Compressors after the effective date of this absorption-type company split are likely to be performed by Kobelco Compressors.
|Splitting Company (as of May 17, 2021)||Successor company (as of May 17, 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||769,375 million yen||2,540 million yen|
|Total assets||2,582,873 million yen||11,762 million yen|
|Net assets per share||1,958.57 yen||211,679.41 yen|
|Net sales||1,705,566 million yen||17,455 million yen|
|Operating income||30,398 million yen||733 million yen|
|Ordinary income (loss)||16,188 million yen||882 million yen|
|Net income (loss) attributable to owners of the parent||23,234 million yen||－|
|Net income (loss) per share||64.05 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%|
|Category||Book value||Category||Book value|
|Current assets||17,700 million yen||Current assets||19,114 million yen|
|Non-current assets||6,379 million yen||Non-current assets||0 million yen|
|Total||24,079 million yen||Total||19,114 million yen|
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.
Kobelco Compressors is scheduled to be relocated to 9-12, Kitashinagawa 5-chome, Shinagawa, Tokyo, Japan on the same date as the effective date of this absorption-type company split. Other than the above, there are no changes to the name, title and name of the representative, business description (excluding the business to be succeeded through this absorption-type company split), capital, or accounting period as a result of this absorption-type company split.
This absorption-type company split is anticipated to have an insignificant impact on Kobe Steel’s consolidated business results.
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