Basic Agreement on Business Integration of Eight Consolidated Subsidiaries Engaged in Equipment Engineering and Maintenance

Nov. 29, 2013

NIPPON STEEL & SUMITOMO METAL CORPORATION

Eight consolidated subsidiaries of Nippon Steel & Sumitomo Metal Corporation (“NSSMC”) have announced today that they will promote discussion toward business integration (the “Business Integration”) on October 1, 2014. These subsidiaries have engaged in the design, construction, maintenance, etc., of the equipment at NSSMC steelworks and have contributed to the operation of each works.

The Business Integration is aimed at integrating the strengths that each company has accumulated, enhancing their comprehensive equipment engineering capabilities, further strengthening the responsiveness to the needs of NSSMC and other customers, and increasing their corporate values, based on the policy of “Strengthening the group companies of the Steelmaking Business,”*1 which is one of the key initiatives laid out in the NSSMC Group Mid-Term Management Plan.*2

NSSMC mobilizes all available resources within the NSSMC group and aims at the early realization of the “Best Steelmaker with World-Leading Capabilities.” Since its foundation, NSSMC has studied measures to increase competitiveness in the fields of equipment, engineering, and maintenance, as one of the important business challenges. We are convinced that the Business Integration will not only further increase the corporate value of each company but will also further strengthen the partnership between the new integrated company and NSSMC by building the competitiveness to win the global competition in terms of the operation and cost of NSSMC’s domestic equipment and by securing the foundation of equipment readiness at NSSMC’s overseas business bases.

*1 Promotion of the integration and reorganization of the companies with overlapping functions and companies for which business competitiveness will be strengthened through integration, etc.
*2 Announced on March 13, 2013

Reference
(1) Companies to be integrated (eight consolidated subsidiaries)
  ・NIPPON STEEL & SUMIKIN TEXENG. CO., LTD.
    (NSSMC investment ratio 59.6% [non-consolidated basis],
     61.2% [consolidated basis])
  ・NIPPON STEEL & SUMIKIN PLANT CO., LTD. (Ditto: 100%)
  ・NITTETSU HOKKAIDO CONTROL SYSTEM CO. (Ditto: 100%)
  ・NITTETSU MURORAN ENGINEERING CO., LTD. (Ditto: 100%)
  ・NITTETSU YAWATA ENGINEERING CO., LTD (Ditto: 100%)
  ・N-TEC OITA ENGINEERING Co., LTD. (Ditto: 100%)
  ・NIPPON STEEL & SUMIKIN KANSAI INDUSTRIES, LTD. (Ditto: 100%)
  ・NIPPON STEEL & SUMIKIN NAOETSU MAINTENANCE Co., Ltd. (Ditto: 100%)
(2) Date of integration: October 1, 2014 (planned)
(3) Type of integration: Basically, an absorption-type merger, with NIPPON STEEL & SUMIKIN TEXENG. CO., LTD. as the surviving company
With regard to NIPPON STEEL & SUMIKIN KANSAI INDUSTRIES, LTD., a part of its business will be succeeded by NIPPON STEEL & SUMIKIN TEXENG. CO., LTD. (by way of company split or business transfer).