As it is, Nippon Steel owns approximately 53% of the business. But as a wholly owned subsidiary, Sanyo Special Steel and Nippon Steel would be more free to share technical information and other resources, enabling them to weather declining domestic demand and increasing Chinese imports as well as better adjust to longer-term electrification trends.

"The company believes the best way to enhance the corporate value of both companies is to develop a cooperative relationship between them without being bound by the constraints of the current circumstances,” Nippon Steel said in a statement. 

“The company also believes that it is necessary to ensure that the company group captures revenue opportunities in regions where a certain increase in demand for special steel is expected, such as North America and India,” it added. 

Nippon Steel is offering JPY2,750 per share and has received the support of the Sanyo Steel board, which is recommending that shareholders tender their shares.