In a statement, NSSMC said the acquisition will expand the reach of its special steel business into Europe, giving it both a manufacturing and sales base there. 

"Our goal with the acquisition of Ovako is to strengthen and expand our global business and further strengthen our technology, product quality, and product development capability for special steel," said NSSMC president Kosei Shindo.

NSSMC will take full ownership of Ovako, an EAF-based producer with plants in Sweden and Finland. It specializes in making clean steels for use in bearings and other products.

In fiscal 2017, Ovako recorded recorded sales EUR921 million (about US$1.1 billion) and sold 780,000 tons. It is owned by investment firm Triton. 

"Triton has been the owner of Ovako for more than seven years, and we view this as an appropriate time for a long-term industrial owner to continue the development of Ovako," said Peder Prahl, director of Triton fund’s general partner. 

"Nippon Steel & Sumitomo Metal Corp. is an ideal partner for Ovako going forward with a ideal cultural fit. This partnership will open new opportunities for both companies," he said.

The deal, which will make Ovako a NSSMC subsidiary, is to close within the first half of fiscal 2018.