(RTTNews) - Aimed at consolidation, Japanese chemical maker Mitsubishi Chemical Holdings Corp. and acrylic fibre maker Mitsubishi Rayon Co., Ltd. said Thursday that they agreed to 'integrate management', whereby Mitsubishi Rayon would become a wholly-owned subsidiary of Mitsubishi Chemical through a tender offer worth 380 yen per share. The total purchase price is estimated to be about $2.5 billion.

Mitsubishi Chemical will initiate the tender offer for all outstanding shares in Mitsubishi Rayon in February 2010, with completion planned by the end of March 2010. If Mitsubishi Chemical is unable to buy all outstanding shares through the tender offer, the two companies plan to hold a share exchange.

The companies noted that the agreement is in accordance with resolutions passed at both companies' meetings of the Board of Directors convened on November 19.

As per the agreement, Mitsubishi Rayon will become a new core business company along with Mitsubishi Chemical Corp., Mitsubishi Plastics, Inc., and Mitsubishi Tanabe Pharma Corp., with Mitsubishi Chemical serving as the pure holding company. This will enable both companies ''to consolidate management resources, achieve an expansion in corporate scale and establish a solid business foundation while strengthening business competitiveness and fortifying development capabilities,'' the companies said in a joint statement.
The Mitsubishi Chemical Group will also acquire businesses including the carbon fiber and composite materials businesses, as well as the water treatment business.

Mitsubishi Chemical has received a fairness opinion from its financial advisor, Mitsubishi UFJ Securities Co., Ltd.

Mitsubishi Rayon also received a fairness opinion from its financial advisors Mizuho Securities Co., Ltd. and JP Morgan Securities Japan Co., Ltd.

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by RTT Staff Writer

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