TOKYO - NKK Corp. and Kawasaki Steel Corp., Japan's No. 2 and No. 3 steelmakers, said yesterday that they have agreed to merge under a holding company to cut costs and meet tougher standards imposed by auto companies.
The two will set up the holding company in October 2002 and reorganize in April the following year. The new company will have annual domestic steel production of 25 million tons, 10 percent behind No. 1 Nippon Steel Corp., the companies said.
They haven't decided on a merger ratio. Their combined market capital is $6.5 billion, about half Nippon Steel's.
Steelmakers are trying to keep pace with consolidation among carmakers and electric appliance makers, which are cutting costs themselves and expect standardized steel.