Dec 22 2006
Nippon Steel Corporation (hereinafter “NSC”), for the purpose of further strengthening its relationship with Usinas Siderúrgicas de Minas Gerais S.A. (hereinafter “USIMINAS”), a Brazilian steel company foremost in South America, has made additional share purchases in Nippon Usiminas Co., Ltd. (hereinafter “NU”), which is the largest shareholder of USIMINAS.
As a result of this additional purchase, NSC’s equity ratio in NU has come to 50.9%, and NU has become a consolidated subsidiary of NSC. NSC’s 1.7% voting share in USIMINAS plus 21.6% voting share which NU owns has now made USIMINAS applicable under the equity method for NSC’s consolidated accounts.
The relationship of NSC and USIMINAS
Since the establishment of USIMINAS, NSC, together with NU, has participated in the management of USIMINAS, while also providing NSC technologies. In 1999, NSC and USIMINAS established “UNIGAL”, a joint venture for the manufacture of hot-dip galvanized automotive steel sheet and also a significant contribution to fast-growing auto makers in South America, largely in Brazil. The result is that USIMINAS has become one of the most important partners in NSC’s global strategies. On November 6, for the further strengthened relationship with USIMINAS, NSC has obtained 1.7% of the voting stock of USIMINAS to become a party to the shareholders agreement, in which NU is a principal party.
The purpose of strengthening the relationship between NSC and USIMINAS
Through the strengthened relationship between NSC and USIMINAS, NSC intends to make more specific response to the increasingly sophisticated needs of customers in South America especially in Brazil. For USIMINAS also, its strengthened ties with NSC will facilitate its efforts to strengthen its productive capabilities, including the implementation of the medium- and long-term investment plans now being scrutinized, and to broaden its product mix, including new products, better tailored to customer requirements. All these are believed to help ensure the continued growth of profits and the enhancement of the corporate values of both NSC and USIMINAS.