Japanese firm rules out job losses at Pilkington

Date: 3 March 2006
Source: Business.guardian.co.uk

Date: 3 March 2006

The Japanese company Nippon Sheet Glass ruled out British job losses yesterday in the wake of its acquisition of Pilkington in a deal that values the St Helens-based glassmaker at £2.2bnThe Pilkington board's decision to back the latest offer from NSG, after rebuffing two approaches, ends 180 years of independence for the British company but it will retain its name and become the European headquarters for NSG.Asked about job losses as a result of the merger, an NSG spokeswoman said: "We are not expecting any - there is very little overlap between the two companies."NSG has held a 20% stake in Pilkington for some time and the two companies have strong technology ties.

"We know them very well; we have been working with them for a long time so it will be business as usual," the spokeswoman said.
Yesterday's deal marks the culmination of a long courtship of Pilkington by the smaller Japanese company. Pilkington's directors, having rebuffed two offers in the past three months, said yesterday that they had decided to recommend a 165p-a-share offer.

Pilkington's chairman, Sir Nigel Rudd, said the NSG offer represented "excellent value" for shareholders. Stuart Chambers, chief executive, said the deal would "expand our geographic reach and enhance Pilkington's position as a global 'world class' glass manufacturer."

Yozo Izuhara, chairman and chief executive of NSG, called the tie-up a "transformational deal for the glass industry. Our historical relationship and cultural fit will allow us to work closely with the management and employees of Pilkington."

Nippon will use bank loans in Japan and Britain to raise 616bn yen (£3bn), which includes the cost of refinancing Pilkington's debts and other costs, the Japanese firm said. It will issue stocks worth a total of ¥110bn to finance the deal.

The agreement will turn Nippon, Japan's second-biggest glassmaker, into a market leader alongside Asahi Glass and St Gobain, with annual sales of about ¥760bn as it builds on Pilkington's dominance in glass for cars and buildings.

Officials at Pilkington, founded in 1826, said the move would help the firm, which already controls a fifth of the global market for glass and is twice the size of Nippon, to extend its reach and improve profitability, fuelled by a rise in demand for glass in the Japanese car industry.

The firm first approached its British target last October with an offer of 150p a share but was turned down. A second offer of 158p was also rejected.

Despite yesterday's agreement, there are concerns about Nippon's ability to finance the takeover. Shinya Yamada, of Credit Suisse, said: "Pilkington has been in the glass business much longer than Nippon Sheet Glass and they have pride as a British firm, so it would be very difficult for Nippon Sheet Glass to control it.

"[Nippon] would have to raise money worth much more than its market cap to finance the deal, and if you think about that, what they are doing is reckless."

Numis Securities said the offer price did "look pretty full".

Pilkington employs some 24,000 people globally, including 1,780 in St Helens.

Nippon stock rose 5.16% yesterday to ¥509. Pilkington was up 2.75p to 161.25p.
600450 Japanese firm rules out job losses at Pilkington glassonweb.com

See more news about:

Others also read

MORE...

Lincoln Glass Celebrates 50th Year
Owners of Lincoln Glass in Newport, Dan and Elayne Mason, celebrated their 50th anniversary in the business this year. Dan's parents, John and Grace Mason, established Lincoln Glass in 1956 and oversaw day-to-day operations for 20 years.
Potters Industries Inc. Announces Price Increase For Metal Finishing and Impact Glass Bead Products
Potters Industries Inc., an affiliate of PQ Corporation, announced today that, effective February 15, 2007, the price on all Metal Finishing Glass Bead and Ground Glass product shipments will increase up to 3 cents a pound.
Retail Architects Say Better-Looking Stores Mean Profits
Edward A. Shriver Jr., a Pittsburgh architect who works in retail store design, encourages architects and retail owners alike to "think outside the box," light years away from the designs that have dominated American retail architecture in recent decades.
Optical-Glass Firm Buys Camera Maker Pentax
Hoya Corp., Japan's largest optical glass maker, agreed to buy camera maker Pentax Corp. for 90.6 billion yen ($765 million) to add endoscopes and surgical scissors.
Mysterious Egyptian Glass Formed by Meteorite Strike, Study Says
Strange specimens of natural glass found in the Egyptian desert are products of a meteorite slamming into Earth between 100,000 and 200,000 years ago, scientists have concluded.
Business Of Glass Manufacturer Gecsat Down 16%
ZF.com reported that Tarnaveni (Romania)-based Gecsat, estimates an approximately 6.4 million-euro turnover for this year, a 16% drop against last year, when the company posted a 7.6 million-euro turnover.

Add new comment