Mitsui Chemicals Makes Tender Offer for ARRK Corporation Shares Through Subsidiary
Mitsui Chemicals, Inc.
Mitsui Chemicals, Inc. (Tokyo: 4183; President & CEO: Tsutomu Tannowa, “Mitsui Chemicals”) announced today that its subsidiary MC Investment 01 Corporation (President: Takayoshi Shimogori, “MC 01”) makes a tender offer for ordinary and preference shares issued by Tokyo Stock Exchange-listed ARRK Corporation. (Tokyo: 7873; President: Tae Ho Kim, “ARRK”).
MC 01 plans to acquire through tender agreement some of ARRK’s ordinary shares from current parent company and top shareholder OPI 11 Corporation, a subsidiary of ORIX Corporation (Tokyo: 8591; President: Makoto Inoue). Additionally, MC 01 plans to conclude tender agreements with two financial institutions to acquire preference shares issued by ARRK.
ARRK operates as a business group that provides development support for new products in the industrial goods sector. With activities ranging from producing design models for initial development to providing support for low-volume manufacturing of products and product molds, the company's primary business model is to support the product development of its customers. Possessing advanced technologies for capabilities that include analytical engineering, ARRK provides products and services of the highest quality sought by clients across five corners of the globe: Japan, North America, China, the ASEAN region and Europe.
Mitsui Chemicals is a chemicals company placing emphasis on the Mobility, Healthcare and Food & Packaging sectors as important fields of business development. The company gives particular attention to the Mobility Business Sector, which focuses on automotive materials and is involved in the development, production and sales of a wide range of performance resin product lines. These include elastomers, performance compounds, performance polymers and overseas polypropylene compounds. While it provides high-quality, high-performance materials on a global scale, Mitsui Chemicals is not limiting itself to materials it is already marketing – including those for metal/resin integration technologies, casting and molding technologies – but is pushing forward to expand into new areas. The company is furthermore pursuing open innovation and collaborations with external companies to more quickly strengthen its ability to provide solutions for product design, analysis, evaluation and prototyping. This is part of a plan for business growth in the Mobility domain, an important profit driver for Mitsui Chemicals.
The purchase of shares is intended to help both Mitsui Chemicals and ARRK in further expanding their business foundations. In addition, both companies will mutually put each other’s technologies to use for achieving continued growth in the global market. ARRK will be able to apply the materials expertise of Mitsui Chemicals, utilizing its diverse lineup of products and materials technologies in carrying out design, prototyping and analytical activities. Meanwhile, Mitsui Chemicals aims to use the strengths of ARRK to broaden the range of business domains for its own products and services, strengthen its ability to market and offer solutions in the Mobility domain and reach further commercialization.
Overview of Mitsui Chemicals and ARRK (as end of March 2017)
|Mitsui Chemicals, Inc.
|Tae Ho Kim
|1-5-2, Higashi-Shimbashi, Minato-ku, Tokyo
|2-2-9 Minami Honmachi, Chuo-ku, Osaka-shi
|125.05 billion yen
|2.00 billion yen
|Primary business areas
|Mobility, Health Care, Food & Packaging, Next Generation Business, Basic Materials
|Comprehensive services regard to the development of new products
Overview of the tender offer
|Class of share certificates to be purchased
|Ordinary shares and preference shares
|Tender offer period
|Nov. 30, 2017 to Jan. 17, 2018 (30 business days)
|Price of purchase
|100 yen per ordinary share and 300 yen per preference share
|Number of share certificates to be purchased *1
|(a) Planned purchase of 301,326,296 shares
(b) Minimum purchase of 230,213,339 shares
(c) No set maximum for purchase
|Total cost of purchase *2
|30.13 billion yen
|Tender offer agent
|Mizuho Securities Co., Ltd.
※1Mitsui Chemicals has the right to exchange each preference share it acquires for three ordinary shares. Consequently, when calculating the total number of share certificates to be purchased, each preference share is counted as three ordinary shares.
※2The total cost of purchase has been reached by multiplying each of the 301,326,296 shares planned to be purchased by a 100 yen purchase price.
The tender offer is expected to contribute to future growth, long-term development and business value, as well as to further share price increases. The move has the approval of ARRK, and is not being made with any intent to delist the company.