Apollo’s Showa acquires Mitsubishi aluminium assets

The aluminium rolled and extruded products activities of Mitsubishi Aluminium Co. Ltd., a wholly owned subsidiary of Mitsubishi Materials Corp., also located in Japan, have been agreed to be acquired by Apollo Global Management Inc.'s Japan-based portfolio firm Showa Aluminum Can Corp. The purchase comprises all of Universal Can Corp.'s shares, which Apollo defines as a manufacturer of aluminium beverage cans. Mitsubishi Materials and Hokkan Holdings Limited, a Japanese packaging company, jointly controlled that operational unit.

“This transaction will bring together two highly complementary businesses, each with a proud heritage of providing high-quality aluminum products to a variety of end-markets and customers. “We are also pleased to have worked with Mitsubishi Materials to structure a carve-out that meets their business portfolio transformation needs,” said Tetsuji Okamoto, partner and head of Japan private equity at Apollo.

Showa Aluminum advertises itself as a prominent aluminium beverage packaging provider with eight manufacturing sites in Japan, Vietnam, and China, as well as two group businesses, Hanacans Joint Stock Co. and Sakai Aluminum Corp. Showa Denko (as it was then named) stated in a June 2020 news release that it collected around 4.43 million used beverage cans (UBCs) in its 2019 fiscal year, which it described as "equal to about 67.8 tonnes of aluminium when converted at a rate of 15.3 grammes of aluminium per can."

According to Apollo, its recent acquisition provides Showa Aluminum with a "transformational chance to become an integrated, value-added aluminium engineering and packaging organisation." According to the equity fund, the purchase "represents Apollo's rising private equity involvement in Japan, and is the third major corporate carveout transaction for Apollo Funds completed or disclosed this year."

Apollo bought a controlling share in an Italian coated recycled cartonboard facility from Cascades Inc., a Canadian paper and board company, last month. Apollo set itself up for its newest acquisition by purchasing the old Showa Denko assets in Japan in January. According to Apollo, the purchase of the Mitsubishi assets is subject to closing conditions and regulatory clearances, and it is scheduled to close by the end of March 2022.

According to Apollo, Showa Aluminum and the Apollo Funds received financial advice from BofA Securities Japan Co. Ltd. and legal advice from Paul, Weiss, Rifkind, Wharton & Garrison LLP and Anderson Mori & Tomotsune.