Japan's Nippon Light Metal and Kobe Steel will integrate their domestic aluminium extrusion businesses, the companies said on 15 June.
The firms aim to sign a definitive agreement by the end of November 2026 and create an integrated entity in April 2027 or later.
Nippon Light Metal's aluminium unit that is being merged has sales totalling around 30,000 t/yr, the company said. Meanwhile, Kobe Steel's Chofu Works, the unit that will be merged, sells about 28,000 t/yr.
Nippon Light Metal supplies aluminium extrusion products to sectors including transport equipment, industrial machinery and containers. Kobe Steel focuses mainly on automotive components, as well as railway vehicles and general distribution sales.
Kobe Steel's aluminium extrusion business posted weaker earnings because of falling orders, it said in a May briefing on its management plan for its April 2024-March 2026 fiscal years. It was considering options, including collaboration with other companies, to strengthen long term competitiveness, it said at the time.
The integration will combine Kobe Steel's alloy development capabilities with Nippon Light Metal's processing technology and broad order base. The companies also plan to improve aluminium scrap collection, standardise capital investment and cut costs by using their combined technical expertise.
The new entity will operate as a joint holding company, with Nippon Light Metal holding a majority stake. The tie-up will cover Nikkeikin Aluminium Core Technology, a unit of Nippon Light Metal, and related divisions under Nippon Light Metal, and Kobe Steel's aluminium extrusion, billet casting and processed product businesses at its Chofu Works, along with domestic sales divisions.
