Itochu to take full control of two units and start buyback

CI Takiron

05/08/2024 11:08

By Yuka Obayashi
       TOKYO, Aug 5 (Reuters) - Japanese trading house Itochu
 8001.T  said on Monday it would spend 220 billion yen ($1.5
billion) to take full control of two units, including apparel
company Descente, and begin buying back 150 billion yen worth of
its own shares on Tuesday.
    The deals are part of a trend among Japanese companies to
dissolve dual listings of parent and subsidiary companies to
enhance corporate governance and improve operational efficiency.
    Itochu, which owns 44.44% of Descente  8114.T , will invest
182.6 billion yen to buy the remaining stake through a tender
offer of 4,350 yen per share, a 16.6% premium to Friday's
closing price.
    It will also spend 37.6 billion yen to buy the 44.31% it
does not own in chemicals company CI Takiron  4215.T  via a
tender offer of 870 yen per share, a 9.7% premium to Friday's
closing price.
    Itochu aims to start the tender offer for Descente by early
November, following the sign-off from competition authorities in
Japan and China, while the tender for CI Takiron will be
conducted from Aug. 6 to Sept. 18.
    "We want to make Descente the core of our textile business,"
Itochu finance chief Tsuyoshi Hachimura told a news conference,
highlighting its growth potential as a sports apparel brand in
Japan and overseas.
    The spending is part of Itochu's record 1 trillion yen
investment plan in growth areas for the current financial year,
announced in April.
    The company also said it would conduct a 150 billion yen
share buyback programme announced in April from Aug. 6 to March
31, as part of a goal to achieve a 50% total shareholder return
ratio this year.
    Net profit at Itochu, in which U.S. investor Warren Buffett
holds a stake, fell 3.1% to 206.6 billion yen in the April-June
quarter due to lower profits at its energy and chemicals
business and its metals business, but the company stuck to its
full-year profit forecast of 880 billion yen.  
    ($1 = 143.3800 yen)

 (Reporting by Yuka Obayashi
Editing by Mark Potter)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))