Japan Chemical Trading Blog
Mitsubishi Chemical Holdings to Acquire Controlling Shares of Taiyo Nippon Sanso
According to the May 13 announcement of Mitsubishi Chemical Holdings, the company and Taiyo Nippon Sanso, one of the major industrial gas companies in Japan, agreed to make a tender offer for 51% shares of the latter by early November.
Mitsubishi Chemical Holdings is a comprehensive chemical and a holding company of Mitsubishi Group. The group also owns Mitsubishi Chemical, Mitsubishi Tanabe Pharma, Mitsubishi Plastics and Mitsubishi Rayon. It was established as a joint holding company of Mitsubishi Chemical and Mitsubishi Pharma in 2005.
The financial results for the previous fiscal year (April 2013 – March 2014) announced on May 12 showed a 13% sales increase from the second previous fiscal year (April 2012 – March 2013) to 3.5 trillion yen (approx. 35 billion dollar), and the operating profit of its core business increased 22% from the second previous fiscal year (April 2012 – March 2013) to 110 billion yen (approx. 1.1 billion dollars).
Taiyo Nippon Sanso is the largest industrial gas company in Japan, holding 40% of the domestic market share. It changed the trade name to the current one when Nippon Sanso and Taiyo Toyo Sanso merged in 2004. Taiyo Nippon Sanso especially outperforms in the semi-conductor business. The financial results for the previous fiscal year (April 2013 – March 2014) of the company announced on May 13 marked a 12% sales increase over the second previous fiscal year (April 2012 – March 2013) to 520 billion yen (approx. 5.2 billion dollar), and a 27% increase to 31.4 billion yen (approx. 314 million dollars) in the operating profit.
Though Mitsubishi Chemical Holdings is the largest chemical manufacturer in Japan, its president Mr. Kobayashi has a strong sense of crisis for the future of the petrochemical business and is hurrying on to restructure the business: he discontinued one of ethylene plants in Kashima Chemical Complex in early May.
Taiyo Nippon Sanso, aiming at the gas demand related to shale gas, which is expected to develop, has already installed many air separation plants in the U.S. Mitsubishi plans to construct a MMA plant using ethylene from shale gas in the U.S. and start the operation around 2017. Mitsubishi can acquire the nitrogen necessary to produce shale gas from Taiyo Nippon Sanso.
On the other hand, by coming under the control of Mitsubishi Chemical Holdings, which has capital strength, the unique businesses of Taiyo Nippon Sanso, such as MOCVD, will increase their opportunities to make a leap forward.