Sumitomo Mitsui Financial Grp, Inc.(ADR) (NYSE:SMFG) Announces Takeover of Edgen Group


Dallas, Texas 10/09/2013 (Financialstrend) – Sumitomo Mitsui Financial Grp, Inc.(ADR) (NYSE:SMFG) is a Japanese based foreign national bank. It has a huge market cap of $6.1 billion with annual income of over $8.15 billion. It has managed to post sales of close to $17.52 billion over the past 12 months trailing period. It has paid out $0.53 dividend over the past 12 months adding up to a forward yield of 5.51% through the same period.

Investors, who bought the shares of this banking major in October 2012, would have seen an appreciation of close to 55% since the time they have owned the stock. In its sustained push to add more customers and diverse portfolios to its business the Japanese bank announced on October 1, that it has entered into a purchase agreement with Edgen Group Inc. The deal is projected to be in the range of $1.2 billion. In exchange, SMFG 1005 owned subsidiary Sumitomo Corp. of America Inc. will gain ownership of Edgen Group’s “steel pipe and valve manufacturing business”.

The Japanese firm is offering close to $12 per share of Edgen. This translates into a 58% premium over the share price of Edgen as of close of business on October 1. The deal completion is expected to happen by end of 2013 and is predicated by regulatory approvals. While the offer price will take the value the outstanding shares of Edgen to roughly $520 million, the entire deal will balloon up to more than $1.2 billion when the accumulated debt is added up to the stock value.

Sumitomo Corp. of America president and CEO, Kazuhiro Takeuchi, commented that the acquisition of Edgen Group will provide the company with “a global distribution platform, including experienced staff, facilities and an expanded specialized steel product offering that will allow SMFG to continue on a growth path which will enable it to emerge as a global energy player.”