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Information of Basic Agreement Conclusion concerning Transfer of Nichimen's Steel Products Business to Sumitomo

Dec. 11, 2002
Nichimen Corporation
Sumitomo Corporation

Information of Basic Agreement Conclusion concerning Transfer of Nichimen's Steel Products Business to Sumitomo


On December 5, 2002, Sumitomo Corporation (hereinafter Sumitomo, President and CEO: Motoyuki Oka) and Nichimen Corporation (hereinafter Nichimen, President: Toru Hambayashi) reached a basic agreement whereby Nichimen would transfer its steel products businesses to Sumitomo targeting as early as the beginning of July, 2003.

Nichimen aims at rebuilding its business portfolio under its medium term management plan “NP2002” and advances concentrating management resources and operations in its strategic business fields by pursuing “selection and concentration”. In line with this strategy, Nichimen decided to transfer its steel products businesses, such as stainless steel, specialty steel, steel sheet for automobile use, other flat rolled steel products, and coated steel sheet businesses etc., to Sumitomo.

Sumitomo, placing steel business as one of its core businesses, plans to further strengthen and expand it through committing its resources to the businesses to be transferred from Nichimen. Earlier this year, Sumitomo had purchased Nomura Trading's steel export businesses and expanded its steel sheet activities in Asia.
The transfer of Nichimen's steel products businesses will, Sumitomo expects, allow an even greater enlargement of its base of business and enhance its position in this field.

The price, the payment manner and the method of business transfer are yet to be determined.

Inquiries

[Nichimen Corporation]
Yoshiki Furuya
Takashi Ochi
Public relations & investor relations Dept.
Tel:81-3-5446-1062

[Sumitomo Corporation]
Keiji Nakajima
Masahiko Ueda
Corporate Communications Dept.
Tel:81-3-5166-3096


 



December 5, 2002

Company Name : Nichimen Corporation (Security Code 8004)
Representative  : Toru Hambayashi, President
Media Contact   : Yoshiki Furuya, Manager
           Public Relations & Investor Relations Dept.
Phone       :   81-3-5446-1062

Information of Basic Agreement Conclusion concerning Transfer of Steel Products Business


Nichimen Corporation (Nichimen) reached a basic agreement with Sumitomo Corporation today to transfer its steel products businesses to Sumitomo Corporation by the beginning of July 2003.

1.Reason for Business Transfer
Nichimen aims at rebuilding its business portfolio under its medium term management plan "NP2002" and advances concentrating management resources and operations in its strategic business fields by pursuing "selection and concentration".
In line with this strategy, Nichimen decided to transfer its steel products businesses to Sumitomo Corporation.


2.Contents of Business Transfer

(1) Business to be transferred by Nichimen
Domestic and overseas steel products businesses at Nichimen, its subsidiaries and overseas offices.
Steel products traded: stainless steel, specialty steel, steel sheet for automobile use, other flat rolled steel products, and coated steel sheet etc.

(2) Business results for FY2001 (ended March 2002) of transferred business

(Millions of Yen)

Steel products
businesses
(a)

Nichimen
(consolidated)
(b)

Ratio
(a) / (b)

Net sales 94,870 2,055,240 4.6%
Gross trading profit 6,615 126,552 5.2%
(Note) Figures for "Steel products businesses" are internal management base.
(3)Assets & Liabilities of transferred business (as of March 31, 2002)

(Millions of Yen)

Assets (book value) Liabilities (book value)
Current assets 33,204 Current liabilities 16,390
Fixed assets 9,983 Long-term liabilities 158
Debt etc. 26,639
Total 43,187 Total 43,187
(Note) Figures in the above table are internal management base.

(4)Transfer price and settlement method
The transfer price and settlement method will be informed as soon as decided.

(5)Method of business transfer
The method of business transfer will be informed as soon as decided.



3.About Sumitomo Corporation (transferee)
(1)Company name Sumitomo Corporation
(2)Main business General Trading Company
(3)Date of incorporation December 24, 1919
(4)Location of headquarters 8-11, Harumi 1-chome, Chuo-ku, Tokyo
(5)Representative Motoyuki Oka, President
(6)Paid-in capital 169,4 billion Yen(as of March 31, 2002)
(7)Number of employees 4,829 people (as of March 31, 2002)
(8)

Main shareholders and shareholdings
(as of March 31, 2002)

Sumitomo Life Insurance Co. 4.87%
Sumitomo Mitsui Banking Corporation 3.78%
Japan Trustee Services Bank, Ltd. 3.72%
The Bank of Tokyo-Mitsubishi, Ltd. 3.67%
Mitsui Sumitomo Insurance Co., Ltd. 3.66%



4.Schedule

December 5, 2002
Corporate resolution for conclusion of the basic agreement

March 2003
Corporate resolution for the business transfer agreement (planned)

Beg. of July, 2003
Business transfer (planned)


5.Outlook of performance
This business transfer is scheduled to be executed for the fiscal year ending March 31, 2004, therefore there have been no changes in the outlook announced.


[For reference]
Outlook for current fiscal year ending March 31, 2003

(Consolidated)

Year ending March
31, 2003

Net Sales 1,900 billion Yen
Operating income 27 billion Yen
Recurring profit 20 billion Yen
Net income 7 billion Yen
      
(Non-consolidated)

Year ending March
31, 2003

Net Sales 1,370 billion Yen
Operating income 14 billion Yen
Recurring profit 10 billion Yen
Net income 3.5 billion Yen
Dividends Undecided


(end)

The original and official version of this notice is written in Japanese. In case of any discrepancies between this notice and the original, the Japanese version shall govern.



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