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Hitachi Chemical narrows down suitors for second round of bidding: Reuters
Posted on Friday, 11 October 2019 09:38
Japan’s Hitachi Chemical has shortlisted bidders following the first round of offers being made, four people with knowledge of the matter told Reuters.

According to these insiders, who asked not to be identified as the process is still private, proposals have valued the target at around USD 6.80 billion.

Hitachi Chemical has reportedly been on the block since March this year, with Bain Capital, Japan Industrial Partners, Nitto Denko and Carlyle Group all making the second round of bidding, three sources observed.

The same people noted that Bain is likely to team up with Japan Industrial Partners on a joint offer.

Final submissions are expected next month with the list of suitors to be narrowed down to just two by the end of the year before a buyer is chosen at the start of 2020, one insider said.

In March, the Nikkei Asian Review reported Japanese conglomerate Hitachi is considering selling a 51.2 per cent stake in its chemical unit in a deal that could be worth between JPY 600.00 billion and JPY 700.00 billion (USD 5.57 billion and USD 6.50 billion).

A few months later, Reuters cited four people in the know as saying a sales process had been initiated and initial bids had a deadline of 9th August to be tabled.

Formed in 1912, Hitachi Chemical has operations in electronics materials, including semiconductors and photovoltaic products, carbon supplies, resins, adhesives and tapes, among others.

In the fiscal year ended 31st March 2019, the group posted revenue of JPY 681.03 billion, down 1.8 per cent from JPY 669.23 billion in the previous 12 months.

Operating income declined 21.4 per cent to JPY 36.35 billion in FY 2018 (FY 2017: JPY 46.22 billion).

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 121 deals targeting Japanese chemical manufacturers announced worldwide in 2019 to date.

The largest of these involves Kirin Holdings buying a 30.3 per cent stake in cosmetics and health supplement manufacturer Fancl for JPY 129.30 billion.

© Zephus Ltd