Nippon Sheet Glass (NSG) is close to acquiring Pilkington in a £2.2 billion (€3.2 billion) deal that will end the glassmaker's 180- year history in the UK.
The board of Pilkington is set to recommend over the weekend an all-cash offer of 165p a share, which values Pilkington at £2.2 billion, a 4.1 per cent premium to yesterday's close of 158¾p. A deal could be announced as early as Monday.
Both NSG and Pilkington declined to comment. Sumitomo, Daiwa and UBS will provide financing for the deal.
Pilkington will be de-listed from the UK stock market after 36 years and Sir Nigel Rudd, chairman, will step down.
This is the second deal in the last six months involving companies that Sir Nigel chairs. Last year Boots, where he is also chairman, announced a £7 billion merger of equals with Alliance UniChem to form a pan-European pharmaceutical, health and beauty distribution and retail powerhouse. He also chairs Pendragon, the UK's biggest car dealer, which is attempting to take control of Reg Vardy.
NSG has said that in the event of a successful deal, far from cutting costs or closing down Pilkington's headquarters at St Helens, it would invest to improve technology at the float glass plant.
The acquisition elevates NSG into the top tier of glass manufacturers and puts nearly half of the world's glass industry into Japanese hands.
The sector is already heavily concentrated, with only four large global players. Asahi, of Japan, is the world's largest manufacturer, with about 23 per cent of the market, and Pilkington is the world's number two with about 19 per cent.
NSG's move on Pilkington first came last November - four years after the Japanese company took a near-20 per cent stake in the Lancashire-based glassmaker.
The initial approach for Pilkington surprised some investors because NSG had previously appeared to be happy to be a long-time minority shareholder.
However, it is believed that NSG has come under pressure to prove that it is a global glassmaker to keep its contracts with some of the biggest carmakers.
