Mitsui & Co., Ltd. is pleased to announce that Mitsui, Mitsui Bussan I-Fashion Ltd. (MIF), which is Mitsui’s core business company in the fashion and textiles business, and Nippon Steel Trading Corporation (NST) will conclude a basic merger agreement (Merger Agreement) regarding the merger between MIF and NST’s textile businesses (Merger) and a shareholders’ agreement, and that MIF and NST will conclude an absorption-type split agreement under which MIF will succeed NST’s textile business.
The pace of change in the domestic and overseas business environment for the textiles business is accelerating. In particular, the Japanese apparel OEM market (OEM: original equipment manufacturers) has been shrinking, and combined with the impact of the Covid-19 pandemic, the business environment is expected to become increasingly severe. Under such circumstances, the policies of Mitsui and NST, both of which have been exploring opportunities to strengthen their respective textiles business platforms and pursuing sustainable growth and development, aligned with each other. On February 3, 2021, the two companies concluded a basic agreement regarding the commencement of discussions on the Merger. After engaging in specific negotiations on and examinations of the Merger, both companies finally agreed to conclude the above agreements regarding the Merger.
MIF and NST aim to improve competitiveness and build a robust business base by maximizing the synergy benefits resulting from the combination and complementation of marketing capabilities, customer networks, and their respective areas of strength in terms of products and services, and by using the increased scale resulting from the Merger to enhance efficiency and strengthen functions, especially in relation to procurement.
Both the companies will make optimal use of their business resources across their entire supply chains from upstream to downstream areas to expand business in overseas markets with growth potential. They will also work to achieve sustainable growth through the use of digital technology to provide new services, as well as the creation of new business opportunities focusing on sustainability, such as the utilization of recyclable materials, and the establishment of a product recycling system.
Mitsui and NST aim to help customers to achieve innovation (such as cost reduction, business process digitalization, and sustainability response) through new initiatives based on the application of digital technology to functional processes, such as planning, production, and logistics, using textiles business knowledge that they have accumulated over many years, together with their integrated strengths and procurement networks.
MIF will issue and allocate 4,133 new shares of MIF to NST as compensation for the Split. As a result, Mitsui and NST will each hold a 50% stake in the succeeding company as of the effective date of the Split after the completion of the Split. MIF will no longer be Mitsui’s consolidated subsidiary but Mitsui’s equity method affiliate.
