Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

After the close today, Japanese materials, machinery, and electric power business <a href="https://www.smartkarma.com/entities/kobe-steel-ltd" target="_blank" data-smartkarma-citation="entities:209:1" rel="noopener">Kobe Steel Ltd (5406 JP)</a> announced they would merge with consolidated subsidiary <a href="https://www.smartkarma.com/entities/kobelco-eco-solutions-co-ltd" target="_blank" data-smartkarma-citation="entities:5802:1" rel="noopener">Kobelco Eco Solutions (6299 JP)</a> in a share swap deal that will result in Kobelco Eco getting delisted from the Tokyo Stock Exchange. Kobelco Eco shareholders will receive a scrip consideration of 4.85 Kobe Steel shares per Kobelco Eco share. As at the time of writing, Kobelco Eco has a market cap of ¥44bn (~US$400mn).The Deal is conditional on Kobelco Eco shareholder approval. The record date for the EGM is set to be 20th August 2021 and the EGM is expected to take place on 30th September 2021. The Merger is expected to become effective on 1st November 2021. More below the fold.<hr><div class="content-remarks">For more information about M&amp;A rules, regulations, and practices in Japan, please refer to <a href="https://www.smartkarma.com/insights/quiddity-japan-m-a-guide-2019" target="_blank" data-smartkarma-citation="insights:28911" rel="noopener">Quiddity Japan M&amp;A Guide 2019</a> </div>

After the close today, Japanese materials, machinery, and electric power business Kobe Steel Ltd (5406 JP) announced they would merge with consolidated subsidiary Kobelco Eco Solutions (6299 JP) in a share swap deal that will result in Kobelco Eco getting delisted from the Tokyo Stock Exchange. Kobelco Eco shareholders will receive a scrip consideration of 4.85 Kobe Steel shares per Kobelco Eco share. As at the time of writing, Kobelco Eco has a market cap of ¥44bn (~US$400mn).The Deal is conditional on Kobelco Eco shareholder approval. The record date for the EGM is set to be 20th August 2021 and the EGM is expected to take place on 30th September 2021. The Merger is expected to become effective on 1st November 2021. More below the fold.For more information about M&amp;A rules, regulations, and practices in Japan, please refer to Quiddity Japan M&amp;A Guide 2019 

Kobelco Eco (6299) - Kobe Steel (5406): This Scrip Merger Is a Done Deal

Making sense of the Global Market, Euromonitor International Ltd.

Yu Mitsuhashi

Making sense of the Global Market

Euromonitor International Ltd.

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Thematic (Sector/Industry)

<ul><li>Sales to domestic construction sector expected to recover<ul><li>In 2016 the Japanese machinery for construction, mining and quarrying industry remained in negative territory for a second year running thanks to declining domestic demand.</li></ul></li><li>Demand for mining equipment upswing likely after long downturn<ul><li>Japanese mining machinery manufacturers experienced another year of flat turnover growth in 2016, thanks to the global slowdown in mining activities following the slump in commodity prices.</li></ul></li><li>Exports poised to return to growth<ul><li>Japan-made construction and mining machinery exports continued to experience year-on-year decline in 2016, placing further downwards pressure on the industry’s performance.</li></ul></li></ul>

Sales to domestic construction sector expected to recoverIn 2016 the Japanese machinery for construction, mining and quarrying industry remained in negative territory for a second year running thanks to declining domestic demand.Demand for mining equipment upswing likely after long downturnJapanese mining machinery manufacturers experienced another year of flat turnover growth in 2016, thanks to the global slowdown in mining activities following the slump in commodity prices.Exports poised to return to growthJapan-made construction and mining machinery exports continued to experience year-on-year decline in 2016, placing further downwards pressure on the industry’s performance.

Industrial Capsule: Machinery for Construction, Mining and Quarrying in Japan

Japan

Kobelco Eco-Solutions Co., Ltd. manufactures environmental equipment and chemical engineering machinery.  The Company's products include industrial heating and cooling equipment and waste water treatment systems for steel makers.  Kobelco Eco-Solutions provides machinery mainly for pharmaceutical, fine chemical, and food industries.

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Kobelco Eco Solutions (6299 JP)

Kobelco Eco (6299) - Kobe Steel (5406): This Scrip Merger Is a Done Deal

This deal between Kobe Steel and a 60%-owned subsidiary is not surprising. Expect more like this across Japan. Japanese companies are winding up...

Janaghan Jeyakumar, CFA

Industrial Capsule: Machinery for Construction, Mining and Quarrying in Japan

Sales to domestic construction sector expected to recoverIn 2016 the Japanese machinery for construction, mining and quarrying industry remained...

Euromonitor International Ltd.

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