The deal is related to the sale of SGL Carbon’s global graphite electrodes business to Japan’s Showa Denko. U.S. antitrust regulators approved that sale on condition that SGL divest the U.S. portion of the business to a third party.  

As a result, Tokai is gaiming 30,000 tons of annual production capacity through two manufacturing sites in Kentucky and Arkansas.

The U.S. business generated net sales of around US$80.8 million in 2016. 

“Although Tokai Carbon supplies products through a sales subsidiary, it has long struggled to establish a strong production and sales structure in the North American market. This acquisition will enable Tokai to acquire a manufacturing base in North America, thereby increasing the company’s presence in the world largest electric arc furnace market and building a solid business base as a global competitor, supported by a tri-regional structure consisting of bases in Asia, Europe, and North America,” Tokai said. 

With that acquisition, Showa Denko’s purchase of the remainder of the business has been finalized. It is gaining about 120,000 tons of electrode capacity at plants in Europe and Southeast Asia, in addition to its existing bases in Japan, the United States and China. It now is the leading supplier in the global graphite electrode industry.

“By making SGL GE its subsidiary, (Showa Denko) will enhance its efficiency in a highly competitive market, which will enable it to pursue a higher level of growth by promoting cost-competitiveness and increasing business durability,” it said. 

It has renamed SGL GE as Showa Denko Carbon Holding GmbH.