Mitsui and Sumitomo cancel plans for fertilizer integration
The Japanese trading companies Mitsui & Co. Ltd. and Sumitomo Corporation announced that they have canceled an agreement to integrate their fertilizer businesses in Japan. The two companies first announced plans to explore integration in March 2012, but reported on Oct. 24 that both had reached “a conclusion that integration would not yield the benefits that were initially anticipated.”
Under terms of the basic agreement reached last spring, the two Tokyo-based companies were considering the establishment of a new company through a joint incorporation-type company split, allowing a newly-merged company to take over the fertilizer raw materials export and import business of both companies. The two companies also planned to merge Japanese manufacturing and sales subsidiaries Summit Agri-Business Corp. and Mitsui Bussan Agro-Business Co. Ltd., and make it a wholly-owned subsidiary of the newly-merged company.
A business alliance established between Mitsui and Sumitomo in March 2010 involving an overseas fertilizer raw materials import business will continue, however. The companies have also promoted cooperation in areas such as the joint allocation of vessels and logistics. It was the results achieved by this original alliance that led the two companies to explore a broader fertilizer integration.