Mitsui Wood Systems Inc., a subsidiary of trading house Mitsui & Co., will integrate its ceramic and fiberboard housing material operations with those of Nichiha Corp., enabling the Mitsui group to pull the plug on the loss-making housing materials business, the three companies announced Wednesday.
The integration will be implemented chiefly through an equity swap slated for October, the companies said in a joint statement.
As the first stage of a series of transactions designed to make Mitsui Wood a Nichiha subsidiary, Mitsui Wood will issue 11 million new shares worth 1.1 billion yen in late March, including 6 million shares to Nichiha, Japan's top maker of ceramic housing materials.
The remaining 5 million shares will be sold to Japan Kenzai Co., a business ally of both Nichiha and Mitsui Wood. Japan Kenzai is a maker of plywood and secondary plywood products, they said.
Mitsui Wood and Nichiha plan to conclude an equity swap agreement in May.