Nippon Shokubai and Sanyo Chemical Industries announced on Wednesday that the two companies had reached a Basic Agreement to move ahead with the consideration toward the integration of their businesses based on an equal footing.
They will establish a holding company in October 2020 to integrate operations, which will be followed by a full-blown merger in 2022.
Nippon Shokubai is a specialized producer of basic and functional chemicals, and Sanyo Chemical has a business of manufacturing and marketing an extremely broad range of performance chemicals.
The move is designed to cut costs and streamline overseas operations, an effort to better compete with foreign rivals.
“We will not only pursue scale but work on higher value-added products,” Nippon Shokubai President Yujiro Goto told a press conference.
The merger “will allow us to pour more resources into new business areas,” said Takao Ando, president and chief executive officer at Sanyo Chemical.
