Showa Denko launches €8bn bid to acquire Hitachi Chemical

Tokyo – Showa Denko is to acquire Hitachi Chemical Co. Ltd for ¥964 billion (around €8 billion) through a shares tender offer to commence in February 2020, the companies announced 19 Dec.

The planned merger, it said, would enable it to better meet global market demands around digitalisation, lightweight and composite automotive materials and speciality semiconductors.

Showa Denko already has the ‘world’s largest share’ in markets for electronic gases, media for hard-disk drives and graphite electrodes and aims to extend this status to over half of its overall portfolio.

Hitachi Chemical, it said, is focused on the areas of information and communications; mobility; energy; and life science and is aiming to transform itself into a “the global-top, high-functionality material manufacturer.”

Showa Denko also noted the economies of scale now being achieved by rival Chinese material manufacturers and the cost-competitiveness of Middle East players with increasing upstream capabilities. 

In this environment, it is important for Japanese material manufacturers “to accelerate business growth as a global leader with the top market share in an appropriate market size,” said Showa Denko.

The merger, it continued, would create “a new leading material producer aiming to provide solutions and having many businesses with leading market shares.”