Nippon Steel, Sumitomo Metal Merger Approved

Industry Week reports that Japan last month approved a merger between the nation’s biggest steelmaker Nippon Steel and third-ranked rival Sumitomo Metal Industries that will create the world’s second-largest steel firm.

The tie-up, planned for official launch on October 1, 2012, will create a steel firm second only to world steel giant ArcelorMittal and generate savings in the face of increasingly intense global competition.

The Japan Fair Trade Commission said that the merger would not be problematic in terms of competition. Through the merger, the steelmakers will aim to realign and strengthen a global network, namely in China, Brazil, India and Southeast Asian countries.

The new company, Nippon Steel & Sumitomo Metal Corp., “will aim to achieve 60 to 70 million tons in terms of global production capacity by further accelerating its overseas business development,” the two firms said in September.