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Bloomberg
Showa Denko KK, Japan’s No 3 diversified chemicals supplier, agreed to pay more than double its own market value to buy its bigger rival Hitachi Chemical Co, to scale up its lithium-ion battery and advanced materials businesses and keep pace with Chinese rivals.
Tokyo-based Showa Denko offered as much as 964 billion yen ($8.8 billion) for all shares of the chemicals unit of Hitachi Ltd, one of Japan’s largest industrial conglomerates, it said. The tender offer will start around February at 4,630 yen a share, the company said. That’s 34% higher than the closing price November 25, the day before talks between the two companies were reported.
The purchase would be Showa Denko’s largest on record and would boost the company’s revenue from lithium-ion automotive batteries and related materials — segments that are growing fast as carmakers race to make more electric-powered vehicles.