According to a report by Reuters, Sumitomo Corp of Japan had agreed to acquire Edgen Group Inc, a steel products maker, for USD520 million. The acquisition was deemed strategic for the Japanese firm as it seeks to expand its distribution business globally.
Sumitomo would be buying Edgen at USD12 per share. The price was a 58% premium of Edgen's closing share price on Monday at USD7.60.
The Sumitomo Corp is a member company of the Sumitimo Group, a large network of companies founded by Masatomo Sumitomo. It has a diverse portfolio of assets, which also includes distribution. Headquartered in Tokyo, Sumitomo is known as one of the top three general trading companies worldwide.
Edgen distributes specialty products like valves and pipes to companies in the energy and infrastructure sector.
The shares of the steel products maker went up 56% to USD11.89 Tuesday morning on the New York bourse. It was not clear whether the share price increase was a result of the investors' reaction to the acquisition of Edgen.
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