NSSMC & Nisshin Steel exchange shares

Nippon Steel & Sumitomo Metal Corporation (“NSSMCâ€?) and Nisshin Steel Co., Ltd. (“Nisshin Steelâ€?) have agreed to conduct a share exchange effective as of January 1, 2019 wherein NSSMC will become a wholly owning parent company and Nisshin Steel will become a wholly owned subsidiary. The share exchange will maximize synergies at an early stage by accelerating the mutual utilization of management resources and further promoting deeper alliances in the NSSMC group.

The share exchange will be conducted through a short-form share exchange procedure under Article 796, paragraph 2 of the Companies Act, under which no approval at a shareholders meeting is required, with respect to NSSMC. With respect to Nisshin Steel, the Share Exchange Agreement will be approved at Nisshin Steel’s extraordinary shareholders meeting to be held by December 2018. Prior to the effective date of the Share Exchange, common shares of Nisshin Steel will be delisted from the Tokyo Stock Exchange on December 26, 2018.

In order to maximize synergy in the NSSMC group’s stainless steel business at an early stage, NSSMC, Nisshin Steel, and Nippon Steel & Sumikin Stainless Steel Corporation (NSSC) have resolved that NSSC will assume part of the steel sheet business contained within the special stainless steel business of NSSMC and the steel sheet business contained within the stainless steel business of Nisshin Steel around April 1, 2019, after the conversion into a wholly owned subsidiary resulting from the share exchange. The three companies entered into a basic agreement regarding the integration of the stainless steel sheet business.

NSSMC believes that the conversion into a wholly owned subsidiary will enable it to more speedily enact intercompany measures including an optimized production system and business restructuring of its group companies in a more expeditious and flexible manner in line with the changes in the business environment, without creating concern for conflict between the shareholders of each company.

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