For inquiries on this matter, please contact
- Mitsui & Co., Ltd.
Corporate Communications Division
Telephone: +81-80-5912-0321
Facsimile: +81-3-3285-9819 - Contact form
Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo, President and CEO: Tatsuo Yasunaga) has today concluded a Memorandum of Understanding with Nippon Steel Trading Corporation ("NST", Head Office: Tokyo, President and Representative Director: Yasumitsu Saeki) concerning the commencement of deliberations (the "Deliberations") on the merger of Mitsui Bussan I-Fashion Ltd. ("MIF", Head Office: Tokyo), which is Mitsui's core business company in the fashion and textiles business, with NST's textile business (the "Merger").
The textiles segment is being affected by accelerating changes in the domestic and international business environments. Of particular significance is the shrinkage of the market for original equipment manufacturers (OEMs—contract manufacturers of products under other parties' brands) for Japanese apparel manufacturers. Combined with the impact of the expanding COVID-19 pandemic, market competition is expected to increasingly intensify. Under such circumstances, Mitsui has been exploring ways to enable MIF, which is its core company in upstream and midstream areas of the textile business value chain, to achieve growth and expand its profit base, while NST has been working to achieve further growth and development for its textile business. This alignment of aims led Mitsui and NST to commence negotiations on the Merger. Both companies view the Merger as a way to enhance the value of the merged company by expanding the scale of its operations and strengthening its functions, leading to the establishment of a solid position in the Japanese apparel OEM market, while also expanding its business base in Japan and overseas by effectively using their resources and implementing various measures in overseas markets that offer the potential for sustained growth and expansion.
The purpose of the Merger is to build a robust income base by (1) improving efficiency and strengthening functions, especially in relation to an organizational structure and procurement, and (2) enhancing the competitiveness of the business by maximizing synergy benefits through the combination and mutual complementation of the sales forces, customer networks, and product and service specialties of MIF and NST.
We aim to achieve business expansion by fully applying the business assets and comprehensive strengths of Mitsui and NST to the expansion of business in overseas markets with growth potential. We also aim to expand the business by providing new services based on the utilization of digital technology, and by exploring the creation of new business opportunities from the perspective of sustainability, including the use of recyclable materials and the establishment of product recycling systems.
We aim to provide enhanced services to our customers through reciprocal use of assets built up by Mitsui and NST over many years, including expertise in textile business, comprehensive strengths, and procurement networks.
We plan to merge MIF with NST's textiles business, and to operate the business under a new merged company. Mitsui and NST will consider and discuss the conditions, including the specific business areas covered by the Merger, and the method of the Merger. Because the Merger will in principle be approached in the spirit of equality, Mitsui and NST will each hold 50% of the shares.
Mitsui and NST will immediately start the Deliberations. The two companies aim to complete the negotiations and conclude a final agreement by June 2021. They will then complete other required procedures, including approval by competition authorities in Japan and overseas, followed by the completion of the Merger by around January 2022.
(1) February 3, 2021 (today) | Conclusion of a Memorandum of Understanding on the Deliberations |
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(2) June 2021 (tentative) | Conclusion of a final merger agreement |
(3) January 2022 (tentative) | Effective date of the Merger |
Mitsui and NST will consider matters that are still undecided and make a further announcement when the negotiations are concluded.
This matter will not affect Mitsui's financial results for the current fiscal year. The effect on its financial performance in the next fiscal year and beyond has not yet been determined.