Daedong Special Steel Acquires Japan High Frequency Steel to Expand R&D and Production

Daido Steel announced on May 15, 2026, its intention to launch a tender offer to acquire Tohoku Steel, an equity-method affiliate, with the objective of making it a wholly owned subsidiary. The move is part of a broader strategic effort to strengthen competitiveness in the specialty steel industry as the automotive sector shifts toward electrification.

The offer price for the acquisition has been set at ¥4,491 per share. This price represents a 95.01% premium over the pre-announcement closing price of ¥2,303, and is approximately 86% above the ¥2,414 closing price recorded on May 15, 2026.

The total cost of the acquisition is expected to reach approximately ¥19.89 billion, or $125.5 million. This figure includes a concurrent share buyback to be conducted by Tohoku Steel.

Daido Steel stated that the acquisition aims to enhance group competitiveness by jointly developing soft magnetic materials for electric vehicles (EVs). The company plans to transfer secondary processing operations to Tohoku Steel. These initiatives are responses to accelerating electrification in the automotive sector and a corresponding decline in demand for internal combustion engines.

The acquisition follows a previous expansion by Daido Steel in February 2026, when the company acquired Japan High Frequency Steel from Kobe Steel. These consecutive moves signal an acceleration of consolidation within the specialty steel industry.

Certain major shareholders will not participate directly in the tender offer. Okaya & Co., Tokyo Yogyo, and affiliates of Hikari Tsushin, who collectively hold 39.61% of the shares, are expected to tender their shares through the buyback initiated by Tohoku Steel instead.

Upon the completion of the tender offer and the subsequent acquisition process, Tohoku Steel will be delisted from the Tokyo Stock Exchange Standard Market.