Nippon Sheet Glass firms up bid to buy Pilkington |
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Mon, 27 Feb 2006 13:55
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TOKYO: Nippon Sheet Glass Co Ltd is buying the balance 80 per cent of British firm Pilkington Plc. in a 1.8-billion-pound deal in a bid to increase its global presence in the sheet glass business. Considering the debts of the company, Nippon will be spending around 3 billion pounds.
The company will pay 165 pence a share in cash, nearly 4.1 per cent higher than the closing price of the company's share. Previously, the company had put forward an offer of 158 pence-a-share, which was rejected by Pilkington shareholders. It said Pilkington's management has agreed to the latest offer and it now intends to complete the takeover by late June. The company had made the initial offer in October.
Nippon Sheet Glass, Japan's No 2 glassmaker, will raise 1.5 million pounds through borrowings from British banks and through convertible bond issues to finance the acquisition.
Nippon Sheet Glass' main competitor in Japan, Asahi Glass Co., the No 1 glassmaker in the world, has nearly 25 per cent global market share. At the No 2 position is Pilkington with around 19 per cent market share. Nippon Sheet Glass has around 4 per cent.
Asahi had acquired several companies in the U.S. and Europe, while Nippon Sheet Glass has overseas production facilities in Vietnam and Malaysia.
Pilkington, one of the oldest companies in Britain and making windshields for Aston Martin's DB9 sports car, has sales and market value almost double that of Nippon Sheet. While the acquisition is seen as a gamble on the part of the Japanese company, Pilkington's production facilities are key to any glassmaker.
Nippon Sheet Glass hopes that the acquisition will allow it to get into markets for glass used in car windshields and reduce its reliance on television and computer displays.
This cross-border deal comes close on the heels of Toshiba Corporation acquiring British Nuclear Fuels' U.S. power arm Westinghouse for $5.4 billion.
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'Merger Monday' nets £26 billion for UK Plc 