ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

Japan's Sumitomo Forestry, Kumagai Gumi form alliance

Future survival at heart of homebuilder-contractor partnership

Sumitomo Forestry President Akira Ichikawa, right, shakes hands with Yasushi Higuchi, his counterpart at Kumagai Gumi, during a Thursday news conference.

TOKYO -- Major homebuilder Sumitomo Forestry and midsize contractor Kumagai Gumi will forge a capital and business partnership, with an eye toward survival amid an anticipated cool-off in construction demand after the 2020 Tokyo Olympics.

The duo said Thursday they will create a capital link by purchasing each other's shares on Nov. 28. Sumitomo will pay roughly 34.6 billion yen ($305 million) for a 20% stake in Kumagai in a private share placement, becoming the general contractor's top shareholder. Kumagai will take a 2.85% interest in Sumitomo Forestry by buying some 10 billion yen in newly issued shares.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more