Release: May 6, 2003
NGK Insulators, Ltd. (President: Shun Matsushita, Head Office: Nagoya, Aichi) announced today that it decided to transfer all of its stock (excluding odd stock) in Asahi Tec Corporation (President & CEO: Sadatsugu Takeuchi, Head Office: Ogasa, Shizuoka) in response to a takeover bid by companies financed by investment funds managed by Ripplewood Holdings LLC (CEO: Timothy Collins, Head Office: New York City, USA).
NGK bought a controlling stake in Asahi Malleable Iron Co., Ltd. (the former Asahi Tec) in 1950 as a means of ensuring a stable supply of hardware for electrical insulators, and has been providing presidents to Asahi Tec ever since. However, Asahi Tec's supply to NGK fell off markedly as electric-power companies cut back on capital investments, so the original purpose of the relationship is no longer an important factor. For this reason, and because NGK has determined that there is little prospect of future synergy between it and Asahi Tec, NGK has decided that agreeing to the takeover bid by Ripplewood is the best means for the future growth of Asahi Tec.
Accordingly, at a meeting of the Board of Directors of NGK held today, it was decided to agree to the takeover bid and transfer the 25,350,000 shares (42.4%) in Asahi Tec held by NGK to JC Holdings Ltd. and JC Holdings II Ltd., both of which are financed by investment funds managed by Ripplewood.
The deal is an amicable M&A, with Asahi Tec announcing today its approval of the takeover bid. Ripplewood is closely aligned with industrial partners in a wide range of fields, and has an abundance of high-quality corporate management resources.
With regard to the impact on NGK, the full takeover is expected to result in a profit on sale of ¥340 million yen on an unconsolidated basis and a loss on sale of ¥3,980 million yen on a consolidated basis for the half year ending September 2003.
NGK plans to continue expanding its business in the "Triple E" business field of Energy, Ecology, and Electronics by concentrating on its core ceramics technology. In this direction, it intends to inject management resources intensively to core business operations and concentrate on R&D with the aim of launching new products and improving the profitability of existing products by drastic cost reductions, with the ultimate aim of achieving high growth and profitability and increasing the value of the company. In addition, with regard to group strategy, the emphasis will be on clarifying the roles of individual group companies and making the most of the flexibility and individuality of each company in order to improve the overall efficiency of management at the consolidated level.
|NGK Insulators, Ltd.||25,350,000 shares (42.36%)|
|Asahi Tec Clients' Shareholding Association||1,896,000 shares (3.16%)|
|Mitsubishi Motors Corporation||1,674,000 shares (2.79%)|
|Meiji Life Insurance Company||1,302,000 shares (2.17%)|
|Net Sales (million yen)||53,877||48,618||51,150|
|Operating Income (million yen)||1,168||- 326|
|Ordinary Income (million yen)||852||- 495||430|
|Net Income (million yen)||389||- 580||210|
|Total Assets (million yen)||51,698||53,061|
|Total Shareholders' Equity (million yen)||15,358||18,059|
|Dividend per Share (yen)||0||0|
In the event that the takeover bid results in a proportional allotment, the number of shares transferred may vary, and for this reason it may not be possible to transfer the desired total number of shares. An announcement will be made as soon as the total number of shares transferred is determined.
May 6, 2003: Board of Directors decision
May 7, 2003: Takeover bid announced
May 27, 2003: Final day of takeover-bid period
June 3, 2003: Takeover-bid settlement date (Date of transfer)