Nippon Sheet Glass charts global expansion

Nippon Sheet Glass Co. announced Monday it agreed to acquire 80 percent of British glassmaker Pilkington plc in a strategy to expand its global production capacity.

The company, which already owns 20 percent of Pilkington, aims to strengthen its position in automotive glass in Asia, Europe and the United States.

Japan's second largest flat glass manufacturer will acquire the remaining 80 percent of Pilkington for about 358.5 billion yen, the company said.

The takeover will boost Nippon Sheet Glass' global share from 4 percent to about 15 percent, equivalent to Asahi Glass Co., the world leader.

An executive of Nippon Sheet Glass said, "We think an acquisition is more advantageous than building our own factories overseas, considering the required time."

The total cost of the acquisition, including the assumption of Pilkington's interest-bearing debt, is expected to be 616 billion yen.

Of that amount, 473 billion yen will be obtained from banks in Japan and Britain and from bond issues, the company said.

Nippon Sheet Glass has trailed Asahi Glass in terms of global marketing strategy.

The company's overseas manufacturing is limited to factories in Vietnam and Malaysia. Its sales in foreign countries represent a mere 15 percent of total sales value.

In contrast, Asahi Glass's overseas sales in value amounted to 44 percent of overall sales.

Nippon Sheet Glass is also outdone by Asahi Glass in terms of glass supply for flat-panel televisions, including plasma display panel TVs and liquid crystal display panel TVs.

Nippon Sheet Glass made Pilkington an affiliated company whose settlement of accounts can be reflected in that of the parent company in 2001 by raising its equity stake to 20 percent.

Those capital tie-ups did not advance the operational alliance between the companies at Pilkington's production bases in Europe and China.

The 24,000 employees at Pilkington will increase Nippon Sheet Glass' workers to 36,000 on a consolidated basis.

600450 Nippon Sheet Glass charts global expansion glassonweb.com
Date: 2 March 2006
Source: Asahi.com

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