Masan High-Tech Materials to forge a strategic alliance with Mitsubishi Materials: MMC to invest US$90 million for a 10% stake in MHT
- Written by Media Outreach
HO CHI MINH CITY, VIET NAM - Media OutReach - 26 October 2020 - Masan High-Tech Materials Corporation ("MHT" or the "Company") signed definitive agreements to establish a strategic alliance in the tungsten industry with Mitsubishi Materials Corporation ("MMC") with the objective of developing a leading, high-tech tungsten materials platform.
Modern plant line of Masan High-Tech Materials in Vietnam
As part of the strategic alliance, MMC will buy 109,915,542 newly issued ordinary shares via a private placement for a total cash consideration equivalent to US$90 million.
MHT's chemical processing plant at Nui Phao polymetallic mineral mine
On completion of the transaction, MMC will own 10 per cent of the share capital of the Company and become the second largest shareholder.
After the transaction is completed, the parties will discuss developing a separate business unit to strengthen and unlock the synergies between their respective mid-stream tungsten platforms.
The ability to offer cutting edge solutions to customers and the strategic flexibility of being integrated across the value chain is a critical factor in delivering sustainable growth, and will continue to be a critical factor in the tungsten space.
MHT prides itself on delivering constantly improving and innovative product offerings. MHT is one of the only tungsten platforms that benefits from consistent supply of primary (concentrates) and secondary raw (recycled) materials that are then further processed into the finest quality oxides, powders, carbides, and chemicals. The success of MHT is underpinned by a combination world-class research and development with dedicated applications engineers who have a track record of delivering fine-tuned specifications to meet end customers' evolving demands.
Post the H.C Starck (HCS) acquisition, a leading global mid-stream tungsten business, in June this year, MMC's participation as a strategic partner is a validation of management'stransformation into a vertically integrated high-tech tungsten platform. MMC will add significant value as a strategic partner, and through the partnership the parties will be positioned to develop cutting-edge solutions for end customers that will accelerate growth, including:
1. Establishing opportunities for joint collaboration and investment in revolutionary research and development of key technologies to enhance the parties' respective high-tech tungsten portfolio;
2. Enhancing the ability of both MMC and MHT to provide industry-leading quality and performance in their high-tech tungsten products going forward; and
3. Strengthening the sales network in the Asia Pacific, which will broaden the consumption of MHT's fine powders in the region.
Craig Bradshaw, Chief Executive Officer of MHT, said: "I am extremely proud that we are starting to realise our strategic vision. Forging a strategic alliance with MMC will certainly accelerate our vision to become an end-to-end global high-tech industrial materials platform. Our customers will benefit the most as this partnership will strengthen our capabilities to supply quality and innovative products and solutions.
"The alliance also positions MHT and HCS to build a mid-stream tungsten Asian franchise, which is the missing piece of our strategic puzzle. I am extremely excited and looking forward to developing a long-term, win-win partnership with MMC."
Makoto Shibata, Director and Chief Financial Officer of MMC, said: "We have set the tungsten business including the cemented carbide tool business to be one of the major pillars of our growth strategy. I am excited about the new collaboration which our investment in MHT will create and it will have a significant impact on our future."
Credit Suisse acted as the exclusive financial advisor to MHT.
The closing of the strategic investment is subject inter alia to certain regulatory approvals (including governmental approvals in Vietnam) and MHT shareholders' approval.
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