Mitsubishi Kakoki Kaisha (Tokyo Prime: 6331) and Tsukishima Holdings (6332) signed an integration agreement and a share exchange agreement on September 30, 2026, after board approvals at both companies. Each Tsukishima share would convert into 0.88 Kakoki shares. Tsukishima would leave the Tokyo Stock Exchange on March 30, 2027 (planned), and the group would run under a new holding company, Mitsubishi Tsukishima Kakoki Holdings Co., Ltd.
How the structure works
The route to that holding company has several steps. On April 1, 2027 (planned), Kakoki would transfer all its businesses, except the functions needed to act as a holding company, to a wholly owned subsidiary it set up on September 30. Kakoki would then become the share exchange parent and Tsukishima Holdings its wholly owned subsidiary. On completion, Kakoki would take the holding company name and the subsidiary would take the Mitsubishi Kakoki name.
Two mergers follow, both planned for July 1, 2027. Tsukishima Holdings would be absorbed into the new holding company, which the companies say avoids keeping an intermediate pure holding company. Tsukishima's machinery subsidiary would be merged into the new Kakoki operating company, which would hold the industrial-machinery business.
A further water-business consolidation into the Tsukishima-JFE water venture, set up in 2023 with JFE Engineering, is only under consideration. Talks with JFE Engineering are still to come and timing is undecided.
Under Japanese accounting rules the exchange is a reverse acquisition: Tsukishima is the acquirer and Kakoki the acquired company. Goodwill is expected to arise in the holding company's consolidated accounts, but the amount is not yet determined.
The ratio
The exchange would deliver 34,811,735 Kakoki shares (planned), including 34,151,480 newly issued shares. The count rests on Tsukishima's 40,125,800 issued shares and 567,010 treasury shares at June 30, 2026, and may change because Tsukishima plans to cancel its treasury shares first. Kakoki had 23,741,850 shares in issue at the end of June. The ratio can be revised if the conditions behind it change materially.
MUFG Morgan Stanley Securities advised Kakoki and Nomura Securities advised Tsukishima, both using September 29, 2026 as the reference date. Both produced a market-price range of 0.79 to 0.83. Nomura's comparable-company range was 0.66 to 0.80 and its discounted cash flow range 0.84 to 1.28. MUFG Morgan Stanley's ranges were 0.52 to 1.23 on comparable companies and 0.70 to 1.24 on discounted cash flow. The agreed 0.88 is above both market-price ranges and above Nomura's comparable-company range.
MUFG Morgan Stanley's analysis was addressed to Kakoki's board only. It is not a financial opinion or a recommendation to shareholders. The companies took no special conflict-of-interest measures, saying none was expected between them.
Votes and conditions
The record date for both extraordinary shareholder meetings is October 16, 2026 (planned), and both meetings are planned for December 4. Kakoki's meeting also votes on the split. Tsukishima's last trading day would be March 29, 2027. The deal depends on those approvals and on regulatory permits. The share exchange agreement lapses if either shareholder vote fails, or if the antimonopoly waiting period has not ended by the day before the effective date, or if the Japan Fair Trade Commission takes action that blocks the exchange. The schedule may change.
Company targets
For the year ending March 2036, the companies target group sales of ¥350bn and operating profit of at least ¥30bn, including synergies of ¥50bn in sales and ¥8bn in operating profit. These are company targets. In the year to March 2026, Kakoki reported consolidated sales of ¥84.24bn and operating profit of ¥9.18bn, against ¥148.95bn and ¥9.84bn at Tsukishima.
A detailed post-merger management plan is still to come. The holding company intends to consider shareholder returns, including share buybacks, over roughly two years after the exchange takes effect to offset dilution from the integration. No amount is given. Kakoki's current president would become chairman and Tsukishima's president would become president, with nine directors at the start, five of them outside appointees (planned).