MITSY: Mitsui Buying Steel Technologies
Large Cap Watch List (Track at Marketocracy) member Mitsui & Co. (MITSY), Japan’s second-largest trading company, agreed to acquire Steel Technologies Inc. for about $396 million in cash to gain control of metals-processing plants in the U.S., Canada and Mexico, according to Bloomberg.com: Japan
Steel Technologies shareholders will receive $30 in cash, 63 percent more than yesterday’s closing price, Tokyo-based Mitsui said today in a statement. Mitsui will assume $136 million of Steel Technologies debt. The companies have been partners for two decades, jointly owning three U.S. processing plants that cut and shape metal for industrial customers.
Mitsui wants to expand in North America as clients such as Toyota Motor Corp. increase spending in the U.S. Toyota plans to build a $1.3 billion plant in Mississippi that can make 150,000 sport-utility vehicles a year. About 45 percent of sales at Louisville, Kentucky-based Steel Technologies are to automakers.
There’s not too much to say about this… the acquisition is bite-size for Mitsui and Steel Technologies has been in the doghouse this year after missing earnings. If Mitsui had its eye on Steel Technologies for a long time, it didn’t lose anything for waiting.
Although interestingly the acquisition premium makes the five-year performance of the two companies virtually identical.
Disclosure: Author is long IShares MSCI Japan Index (EWJ) at time of publication.
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