Japan cutting tools M&A: tungsten constraints, carve-outs from industrial groups, IMC's Japanese holdings, distributor deals and Japanese majors' deals abroad.

(Updated October 2026. USD figures are converted at USD/JPY = 150 for reference. EUR figures are shown as disclosed.)

Japan’s production of cutting and carbide tools has stayed within a narrow range for a decade. At the same time, tungsten, the main raw material for cemented carbide, has risen to record prices since China introduced export controls in February 2025, and Japanese toolmakers have responded with price increases and new investment in recycling. Since the 2000s, Japan cutting tools M&A has included the following moves. Industrial groups for which tools were not a core business (Toshiba, Hitachi Metals and NGK Spark Plug, now Niterra) have exited or reduced their ownership of the business, and those operations are now owned by Mitsubishi Materials or by IMC, the Berkshire Hathaway-owned tooling group (Niterra retains 49% of its former unit). A tool distributor whose stated policy is to partner with companies facing issues such as the absence of a successor has acquired owner-held manufacturers and distributors. Abroad, Mitsubishi Materials has bought a German tungsten recycler and an Italian regrinding company, and OSG has bought a Dutch diamond-tool maker.

This article is written for corporate development and international business development teams at foreign companies that see Japan as an acquisition market, a source of partners, or a source of acquirers for their own businesses. It reviews Japan cutting tools M&A through the market structure, the industry landscape, domestic consolidation, foreign capital in Japanese cutting tools, Japanese cutting tool majors’ acquisitions abroad, the industry-specific factors acquirers examine, and the implications for overseas acquirers.

1. Market Structure — Flat Production Value and Raw-Material Constraints

Market size

According to the Japan Cutting & Wear-resistant Tool Association (JTA), which compiles data from the Ministry of Economy, Trade and Industry’s machinery statistics, Japan’s production of cutting and wear-resistant tools was ¥413.3bn (~USD 2.76bn) in calendar 2025, 102.1% of the prior year. Carbide tools accounted for ¥298.9bn (~USD 1.99bn), high-speed and special steel tools for ¥75.2bn (~USD 501mn), and diamond tools for ¥39.2bn (~USD 261mn) (JTA production statistics). On a fiscal-year basis, production value between FY2015 and FY2024 stayed between about ¥390bn and ¥450bn (~USD 2.6–3.0bn), with the exception of FY2020 (¥321.7bn).

According to the same JTA data, carbide tool production in January to July 2026 was 117.6% of the same period a year earlier. OSG cited price revisions as a driver of its profit growth for December 2025 to August 2026, so growth in value includes price increases that reflect higher raw-material costs and should be read separately from volume. NS Tool has also raised catalog prices for carbide tools from August 2026 orders (by 20% or more for products over 6 mm in diameter), and these increases will appear in later statistics.

Product segments

Product segments differ in how tools are used, how suppliers relate to customers, and whether services such as regrinding are involved. In M&A, the segments in which a company holds positions shape both the set of likely acquirers and the way they assess the business.

Segment	FY2024 production value	Main products	Business characteristics
Carbide and cermet inserts	¥151.1bn (~USD 1.01bn)	Indexable inserts for turning and milling	Consumables replaced when the cutting edge wears, used with tool holders. About half of carbide tool production value
Solid carbide tools	¥109.4bn (~USD 729mn)	Drills, end mills, cutters, lathe tools	Made entirely of cemented carbide. Geometry is designed around the customer’s workpiece and machining conditions; worn tools are reground and reused
Diamond and CBN tools	¥39.2bn (~USD 261mn)	Diamond cutting tools, CBN tools	Used for hardened steel, non-ferrous metals, plastics, lenses and similar materials. Grinding and forming of the cutting edge determines precision
High-speed and special steel tools	¥74.0bn (~USD 493mn)	Taps, drills, gear-cutting tools	A product group alongside carbide tools. Many specialist manufacturers in taps

Segments and values follow JTA’s FY2024 statistics. Carbide tools also include ¥36.0bn (~USD 240mn) of other carbide tools.

Tool demand follows the industries that machine metal on machine tools. According to the Japan Machine Tool Builders’ Association (JMTBA), machine tool orders in 2025 were ¥1,604.3bn (~USD 10.7bn, 108.0% of the prior year), of which domestic orders were ¥440.9bn (~USD 2.94bn, 99.8%) and overseas orders ¥1,163.5bn (~USD 7.76bn, 111.5%). By customer industry, general machinery accounted for 39.9% of domestic orders and automotive (including parts) for 19.8%. Automotive orders were 95.7% of the prior year, while aircraft, shipbuilding and transport equipment were 145.8% (JMTBA 2025 orders, final figures).

Five drivers of consolidation

Tungsten constraints — According to the US Geological Survey (USGS), world tungsten mine production in 2025 was an estimated 85,000 metric tons, of which China produced 67,000 tons. China introduced new export controls on some tungsten items in February 2025, and the Rotterdam concentrate price rose from USD 252 per mtu (metric ton unit, 10 kg of tungsten trioxide) in 2024 to USD 380 in 2025 (USGS Mineral Commodity Summaries 2026: Tungsten). Mitsubishi Materials points to dependence on China for about 80% of tungsten concentrate supply and states that prices surged from April 2025 to record highs. Fuji Seiko disclosed in April 2026 that tungsten powder ordered since the start of the year was held at Chinese customs, and NS Tool did not publish a forecast for the fiscal year ending March 2027, stating that the rise in tungsten prices made a reasonable estimate difficult. Mitsubishi Materials’ acquisition of a German tungsten recycler (Case 7) was a response to these constraints.
Recycling and security of raw materials — In materials for its medium-term strategy for FY2026–FY2028, Mitsubishi Materials sets a target of raising the share of recycled material in the tungsten feedstock used at its sites outside China from about 70% in FY2025 to 100% by FY2030, and in 2026 it announced capacity expansions at H.C. Starck in Germany and at Japan New Metals. In April 2026, A.L.M.T. (Allied Material), a Sumitomo Electric subsidiary, announced a new plant in Toyama Prefecture costing about ¥15.9bn (~USD 106mn), which will raise its capacity for tungsten and tungsten carbide powder by about 1.5 times. Among mid-size makers, Dijet Industrial and Fuji Die formed a business alliance in June 2026 to sell alloys that use less tungsten and cobalt. Collecting used tools, recycling feedstock and developing alternative materials have become ways of securing raw materials.
Shifts in end markets — Automotive accounted for about one-fifth of domestic machine tool orders in 2025, and automotive orders were 95.7% of the prior year. Toolmakers have each set out their growth fields: Mitsubishi Materials names high-value products for aerospace, space, medical and semiconductors; OSG targets micro-precision machining and diamond tools, with diamond tool sales of ¥10bn (~USD 67mn) by 2030. Union Tool, a maker of drills for printed circuit boards, reported first-quarter 2026 revenue up 42.6% year on year, driven by board demand for AI servers. Acquisitions abroad have also targeted new customer fields, such as eyeglass and medical lenses (Case 9).
Portfolio choices by industrial groups — Toshiba separated Tungaloy through a management and employee buyout in 2004; Hitachi Metals transferred its tool business to Mitsubishi Materials in two steps in 2015 and 2020; and NGK Spark Plug moved its cutting tool business into a joint venture with IMC in 2023 (Sections 3 and 4). The tool businesses of Hitachi Metals and NGK Spark Plug were acquired by Mitsubishi Materials and IMC, whose core business is tools, and Tungaloy joined IMC in 2008 after its independent phase following the buyout.
Business succession — Japan’s Small and Medium Enterprise Agency estimated that by 2025 about 2.45 million owners of small and medium-sized enterprises would be over 70, that about half of them (1.27 million) would have no designated successor, and that if closures increased unchecked, a cumulative 6.5 million jobs and about ¥22tn (~USD 147bn) of GDP could be lost by 2025 (SME Agency, Current Analysis of Business Succession and M&A). The year covered by the estimate has now passed. In the tool industry, distributor Cominix has stated that it continually considers strategic alliances with companies facing management issues such as the absence of a successor, and in 2020 acquired a cutting tool maker majority-owned by its president (Case 2).

2. Industry Landscape

Japan’s cutting tool majors

Company	Headquarters	Revenue	Main fields and recent moves
Mitsubishi Materials (Carbide Products segment)	Chiyoda-ku, Tokyo	¥147.2bn (~USD 981mn), FY2026/3, segment	Acquired H.C. Starck (2024) and U.F.P. (2025). Plans to combine its domestic cutting tool sales with MOLDINO’s in April 2027
OSG	Toyokawa, Aichi	¥160.6bn (~USD 1.07bn), FY2025/11, consolidated	Focus on taps and other hole-making tools. Acquired Precision Tools Holding (Netherlands) in 2024. Forecasts revenue of ¥193.0bn (~USD 1.29bn) for FY2026/11, citing price revisions and the weak yen
Sumitomo Electric Hardmetal	Itami, Hyogo	Not disclosed (wholly owned by Sumitomo Electric Industries)	Carbide, CBN and diamond tools under the IGETALLOY, SUMIBORON and SUMIDIA brands
Kyocera (industrial tools business)	Kyoto	¥285.9bn (~USD 1.91bn), FY2026/3, including power tools	Acquired SGS Tool Company (US) in 2016. Completed the sale of a US distribution subsidiary in January 2026
Tungaloy	Iwaki, Fukushima	Not disclosed (IMC group)	Scheduled to merge with NTK Cutting Tools on January 1, 2027

Among the majors, Tungaloy is foreign-owned, and Sumitomo Electric Hardmetal is wholly owned by Sumitomo Electric Industries. Mitsubishi Materials owns MOLDINO, which it made a wholly owned subsidiary in 2020 (Case 1). In October 2026, Mitsubishi Materials announced that it will transfer its own and MOLDINO’s domestic cutting tool sales businesses to a new subsidiary, Mitsubishi Materials Tools, which is scheduled to start operations on April 1, 2027. Both brands will be retained, and Mitsubishi Materials and MOLDINO will concentrate on development and manufacturing.

Listed mid-size and specialist toolmakers

Company	Headquarters	Revenue	Main fields and recent moves
Union Tool	Shinagawa-ku, Tokyo	¥40.2bn (~USD 268mn), FY2025/12	Drills for printed circuit boards (about 30% global share, company estimate). Forecasts ¥49.6bn (~USD 331mn) for FY2026/12
Nachi-Fujikoshi	Minato-ku, Tokyo	Tools ¥34.2bn (~USD 228mn), FY2025/11, within the machinery business; consolidated ¥235.9bn (~USD 1.57bn)	Diversified machinery maker covering tools, machine tools, robots and bearings
Fuji Seiko	Toyota, Aichi	¥20.5bn (~USD 137mn), FY2026/2	Carbide tools account for about 30% of consolidated revenue. Listed on the Nagoya Stock Exchange Main Market
Fuji Die	Ota-ku, Tokyo	¥17.4bn (~USD 116mn), FY2026/3	Mainly carbide wear-resistant tools and dies
NS Tool	Shinagawa-ku, Tokyo	¥9.5bn (~USD 63mn), FY2026/3	Small-diameter end mills. Moved from the TSE Prime Market to the Standard Market in November 2025
Dijet Industrial	Hirano-ku, Osaka	¥9.3bn (~USD 62mn), FY2026/3	Carbide toolmaker; cutting tools ¥7.7bn (~USD 51mn); export ratio 57.2%

Nachi-Fujikoshi is shown with its tool revenue. Dijet Industrial has no parent company; according to its annual securities report, its largest shareholder is its suppliers’ shareholding association (8.88%), and it has no controlling shareholder. Within the scope of our research, the listed companies that have acquired owner-held businesses or shares in Japan since 2020 are OSG (Case 3) and tool distributor Cominix (TSE Standard, Chuo-ku, Osaka; Cases 2 and 4). Among mid-size makers, Dijet Industrial and Fuji Die have chosen a business alliance without a capital relationship.

Tool subsidiaries of Japanese and foreign groups

Several Japanese groups hold tool companies as subsidiaries. MOLDINO (Sumida-ku, Tokyo), wholly owned by Mitsubishi Materials, has production sites in Narita, Yasu (Shiga Prefecture) and Uozu (Toyama Prefecture), and reported revenue of ¥21.0bn (~USD 140mn) and ordinary profit of ¥3.86bn (~USD 26mn) for FY2026/3. A.L.M.T. (Chuo-ku, Tokyo), wholly owned by Sumitomo Electric Industries, produces tungsten and molybdenum products and diamond and CBN tools. OSG Diamond Tool (Takashima, Shiga Prefecture) is the OSG group’s diamond tool maker.

Among foreign-owned companies, Tungaloy (capital of ¥8bn, 100% foreign-owned) operates plants in Iwaki, Nisshin (Aichi), Nirasaki (Yamanashi) and Kurume (Fukuoka), and NTK Cutting Tools is owned 51% by IMC and 49% by Niterra. The two companies are scheduled to merge on January 1, 2027, with Tungaloy as the surviving company; the treatment of Niterra’s stake after the merger has not been disclosed.

Owner-run and non-listed manufacturers

Non-listed toolmakers include Yamawa Mfg. (Chuo-ku, Tokyo; taps; established a holding company in 2021), Tanoi Mfg. (Shiraoka, Saitama; taps and dies; 64 employees) and Okazaki Seiko (Higashiyodogawa-ku, Osaka; founded in 1933). Non-listed companies disclose limited information, and their financial results and shareholders are not published. As with Kawanobe Seisakusho (85.8% held by its president before the sale) and KamogawaHD (100% held by two individuals before the sale) in Section 3, the capital structure of owner-run companies often becomes public only at the time of a sale. Identifying such companies requires research beyond public databases.

Concentration in Kansai

Of the companies covered in this article, Sumitomo Electric Hardmetal (Itami, Hyogo), Dijet Industrial (Hirano-ku, Osaka), Okazaki Seiko (Higashiyodogawa-ku, Osaka) and Kyocera (Kyoto) are headquartered in the Kansai region. Among distributors, Cominix (Chuo-ku, Osaka) is based in Kansai and acquired the Kamogawa group of Fushimi-ku, Kyoto, in 2024 (Case 4). Shiga Prefecture hosts MOLDINO’s Yasu plant and the headquarters of OSG Diamond Tool.

3. Domestic Consolidation — Carve-Outs and Owner Exits

Case 1: Mitsubishi Materials and Mitsubishi Hitachi Tool (2015 and 2020) — An industrial group’s tool business acquired in two steps

In April 2015, Mitsubishi Materials acquired 51% of Hitachi Tool Engineering, the tool subsidiary of Hitachi Metals, and renamed it Mitsubishi Hitachi Tool Engineering. On April 1, 2020, it acquired the remaining 49% from Hitachi Metals, making the company a wholly owned subsidiary, and renamed it MOLDINO on the same day. Mitsubishi Materials cited the aim of managing its carbide business with greater agility to respond to rapidly changing market needs. Prices were not disclosed in either step.

For the fiscal year ended March 2019, Mitsubishi Hitachi Tool reported revenue of ¥26.15bn (~USD 174mn) and operating profit of ¥5.57bn (~USD 37mn), an operating margin of 21.3%. The company traces its origins to Teikoku Cutter Manufacturing, founded in Osaka in 1928. In October 2026, Mitsubishi Materials announced the combination of MOLDINO’s and its own domestic sales businesses (Section 2; as an intra-group reorganization, this is not counted as a separate case).

This transaction shows that (i) an industrial group for which tools were not a core business transferred its tool business to a tool major, (ii) ownership moved in stages over five years, from a majority stake to full ownership, and (iii) the acquirer kept the production sites inherited from Hitachi Tool and runs MOLDINO as a separate name and brand alongside its own.

Case 2: Cominix and Kawanobe Seisakusho (2020) — A tool distributor acquires an owner-run manufacturer

In December 2020, tool distributor Cominix acquired 85.8% of Kawanobe Seisakusho (Ota-ku, Tokyo; founded 1957; plant in Hitachiomiya, Ibaraki), a cutting tool maker, from its president. Kawanobe reported revenue of ¥782mn (~USD 5.2mn) and operating profit of ¥27mn (~USD 0.18mn) for the fiscal year ended December 2019, counted major Japanese automakers and parts makers among its main customers, and had a US tool manufacturing and sales subsidiary in Ohio. The price was not disclosed at the seller’s request, and was set based on financial, tax, legal and labor due diligence by outside specialists.

Cominix stated that it continually considers strategic alliances with companies facing management issues such as the absence of a successor, and that its growth strategy targets companies with strong customer bases. It cited synergies between Kawanobe’s customers in Japan and North America and its own sales strength and product range, and the expansion of its tool manufacturing business by gaining Kawanobe’s production technology, people and wide range of production equipment. It stated that it planned to proceed with making Kawanobe a wholly owned subsidiary.

This transaction shows that (i) the buyer of a toolmaker majority-owned by its president was a tool distributor rather than another manufacturer, (ii) the buyer valued the customer base in Japan and North America together with production technology, people and equipment, and (iii) the buyer acquired a majority first, with full ownership planned as a later step.

Case 3: OSG group and Micro Diamond (2024) — Business transfer from a maker with a specific technology

On October 1, 2024, Nissin Diamond (Takashima, Shiga; established 1968; part of the OSG group since 2006) took over the business of Micro Diamond (Yokohama). OSG describes Micro Diamond as the only manufacturer in the world able to produce ultra-small-diameter single-crystal ball end mills with its proprietary technology. The consideration and Micro Diamond’s financial results were not disclosed. On December 1, 2024, Nissin Diamond changed its name to OSG Diamond Tool.

OSG cited the development of micro-precision machining in the diamond tool market, and expects the business, together with Precision Tools Holding in the Netherlands acquired in July of the same year (Case 9), to enter the fields of molds for precision electronic components and medical molds.

This transaction shows that (i) a listed major’s group company took in a manufacturer with a specific technology through a business transfer rather than a share acquisition, (ii) the objective was a specific technology (ultra-small-diameter single-crystal diamond tools) rather than revenue scale, and (iii) the acquirer combined a domestic business transfer and an overseas acquisition as measures for the same growth field.

Case 4: Cominix and KamogawaHD (2024) — A tool distributor acquires an owner-held distribution group

In November 2024, Cominix agreed to acquire all shares of KamogawaHD, the holding company of the Kamogawa group in Fushimi-ku, Kyoto, and completed the acquisition on December 24, 2024. Kamogawa, founded in Kyoto in 1949, supplies production goods and combines trading and manufacturing functions; its group includes an abrasives company in Hokkaido and subsidiaries in the Philippines and Vietnam. KamogawaHD reported revenue of ¥10.37bn (~USD 69mn), operating profit of ¥320mn (~USD 2.1mn) and net assets of ¥2.42bn (~USD 16mn) for the fiscal year ended March 2024. Its shares were held by two individuals, and the acquisition price was ¥4.30bn (~USD 28.7mn), or about ¥4.33bn including advisory fees. Based on the disclosed figures, the equity price (not adjusted for debt or cash) was about 13 times operating profit and about 1.8 times net assets for the fiscal year ended March 2024.

Cominix positioned the deal as part of its aim to become a specialist trading company for production goods able to meet all customer needs, and cited combined sales networks, shared manufacturing know-how, and cost reductions through common digital systems, locations and logistics. Cominix targets revenue of ¥50bn (~USD 333mn) and operating profit of ¥2.5bn (~USD 17mn) for the fiscal year ending March 2029.

This transaction shows that (i) tool distributor Cominix acquired a distribution group in the same business, (ii) the buyer valued the target’s manufacturing function and overseas sites in addition to its sales network, and (iii) the price and financials of an individually held group were disclosed, making the price level visible.

4. Foreign Capital in Japanese Cutting Tools — Out-In Transactions

Acquisitions of Japanese toolmakers by foreign capital center on the IMC (International Metalworking Companies) group. Berkshire Hathaway acquired 80% of IMC for USD 4bn in 2006 and the remaining 20% in 2013. IMC has taken ownership of two Japanese tool businesses: Tungaloy in 2008 and, through a majority-owned joint venture, the cutting tool business of NGK Spark Plug in 2023. Within the scope of our research, we did not identify acquisitions of Japanese cutting tool makers by other foreign tool groups. For foreign groups, these two cases show the routes by which a Japanese tool business has changed hands and what the sellers expected from a foreign owner.

Case 5: IMC and Tungaloy (2008) — A former Toshiba subsidiary joins a foreign tooling group

Tungaloy was founded in 1934 as a maker of special alloy tools, became Toshiba Tungaloy in 1958, and became independent of Toshiba in April 2004 through a management and employee buyout, delisting from the Tokyo Stock Exchange at the same time. In September 2008, Tungaloy joined IMC. It is now 100% foreign-owned, with capital of ¥8bn, headquarters in Iwaki, Fukushima, and plants in Iwaki, Nisshin (Aichi), Nirasaki (Yamanashi) and Kurume (Fukuoka). Its revenue is not disclosed.

This transaction shows that (i) a Japanese tool business separated from an industrial group passed through an independent phase after a buyout before joining a foreign tooling group, and (ii) after the acquisition, the Japanese company continued to operate under its own brand with its domestic production sites.

Case 6: IMC and NGK Spark Plug’s cutting tool business (2023) — A carve-out into a majority-owned joint venture

NGK Spark Plug (now Niterra, Nagoya) has sold ceramic cutting tools since 1958. In July 2022, it signed a basic agreement with IMC to consolidate its cutting tool business into its subsidiary NTK Cutting Tools and to turn that company into a joint venture owned 51% by IMC and 49% by NGK Spark Plug, operated jointly by the two companies. The joint venture was formed in 2023.

NGK Spark Plug explained that global competitors with broad product ranges benefit from scale, and that it had considered partnerships to strengthen technology, competitiveness and sales, and to improve profitability under its long-term plan to 2030. It expected smoother procurement through IMC’s scale, a stronger product lineup, cost savings from sharing production systems and know-how, wider coverage of customer needs and faster development. For IMC, the stated benefit was greater business scale through NGK Spark Plug’s technology and product lineup. In September 2026, Tungaloy announced that it will absorb NTK Cutting Tools on January 1, 2027, with Tungaloy as the surviving company, and that both brands will continue to offer their products and services.

This transaction shows that (i) a Japanese industrial group chose a foreign tooling group as a partner to gain scale in procurement, product range and development, (ii) the seller kept a 49% stake rather than exiting entirely (its treatment after the 2027 merger has not been disclosed), and (iii) two Japanese companies acquired by the same foreign group at different times are now being combined within that group.

Taken together, Cases 5 and 6 show three points for foreign groups considering Japan. First, both Japanese tool businesses originated in industrial groups whose core businesses lay elsewhere (electronics and spark plugs), rather than in tool specialists. Second, both transactions kept the Japanese brand, and the Tungaloy-NTK merger keeps both brands in use. Third, the NTK seller explained its decision in terms of scale, procurement, product range and development speed, which a foreign group with a global network could provide.

5. Japanese Cutting Tool Majors Abroad — In-Out Transactions

For overseas companies, Japanese cutting tool majors are potential acquirers of their businesses and potential partners. Their recent transactions show what they buy, on what criteria and at what price levels. Earlier precedents include Kyocera’s acquisition of SGS Tool Company in the US (a solid carbide tool maker founded in 1951) and OSG’s acquisition of Amamco Tool & Supply in the US (a carbide tool maker serving aerospace), both in 2016. The cases below cover transactions since 2023.

Case 7: Mitsubishi Materials and H.C. Starck (completed December 2024) — A tungsten recycler

In May 2024, Mitsubishi Materials agreed to acquire all shares of H.C. Starck Holding (Germany) from Vietnam’s Masan High-Tech Materials (MHT), and completed the acquisition on December 17, 2024, ahead of the original target of the end of March 2025. The consideration was USD 134.5mn (about ¥21bn at the exchange rate in the disclosure). H.C. Starck was established in 1920 and is headquartered in Goslar, Germany. It produces, sells and recycles tungsten powder, tungsten carbide powder and tungsten chemicals, with production sites in Germany, Canada and China. For the year ended December 2023, revenue was EUR 352.6mn and the company recorded an operating loss of EUR 10.1mn.

Mitsubishi Materials made the acquisition as part of its strategy to become a leading company in tungsten products recognized by customers globally, and cited joint research and development with its subsidiary Japan New Metals, cross-selling, and the use of recycling technology and capacity as synergies. The seller, MHT, cited Vietnamese regulations that restrict scrap imports and constrain its recycling strategy as the reason for the sale. In July 2026, Mitsubishi Materials announced an investment of about EUR 50mn at the Goslar plant to raise scrap processing capacity from about 5,000 to about 7,000 tons a year. About 80% of the plant’s feedstock is currently recycled material.

This transaction shows that (i) a Japanese tool major acquired upstream raw-material and recycling capability abroad rather than tools, (ii) the acquirer bought a business with an operating loss for about 0.4 times its 2023 revenue (about ¥55.4bn), based on the yen amounts in the disclosures, and added capital investment after the acquisition, and (iii) the seller divested because it could not execute the business’s strategy under its home-country regulations.

Case 8: Mitsubishi Materials and U.F.P. (April 2025) — A European regrinding company

In April 2025, Mitsubishi Materials’ European holding company, MMC Hardmetal Europe Holdings, acquired all shares of U.F.P. of Italy (Missaglia, Lombardy; founded 1987) and made it a consolidated subsidiary. U.F.P. manufactures special cutting tools and regrinds tools, operates two production sites in Italy, and has annual revenue of about EUR 12mn. According to its website, it handles more than 19,000 orders a year from more than 1,000 customers in aerospace, medical, automotive and energy. The price and seller were not disclosed.

Mitsubishi Materials cited growing customer demand in Europe for fast, high-quality regrinding, and stated that it would combine U.F.P.’s expertise and capacity with its production site in Valencia, Spain, to broaden its service portfolio.

This transaction shows that (i) a tool major used an acquisition to add regrinding capacity, a service, rather than manufacturing alone, and (ii) a company with about EUR 12mn of revenue became an acquisition target as a means of meeting regrinding demand in Europe.

Case 9: OSG and Precision Tools Holding (July 2024) — A diamond tool maker

In July 2024, OSG acquired all shares of Precision Tools Holding (Valkenswaard, the Netherlands; founded 1989) through its European subsidiary OSG Europe. The core subsidiary, Contour Fine Tooling, makes diamond tools for eyeglass and intraocular lenses, and the group consists of nine companies including Contour. For the year ended December 2023, consolidated revenue was EUR 19.3mn and operating profit EUR 3.13mn. OSG disclosed the price in January 2025 as EUR 35.3mn; on an equity price basis (not adjusted for debt or cash), this is about 1.8 times revenue and about 11 times operating profit. Before the acquisition, the company was wholly owned by Diamond Tools Group B.V. of the Netherlands.

OSG positioned the deal as part of expanding its micro-precision machining business, a key measure of its medium-term plan, and of reaching new customer segments, and stated that it would gain new customer fields and grinding technology for diamond tools. In its integrated report, OSG cites selling its carbide roughing tools to Contour’s customers, who use Contour’s diamond tools for finishing. Under its current medium-term plan (FY2025–FY2027), OSG plans strategic investment of ¥60–70bn (~USD 400–467mn), including M&A.

This transaction shows that (i) a tool major focused on taps acquired access to a customer field it had not served (eyeglass and medical lenses), (ii) the disclosed price and financials make the price level, about 11 times operating profit, visible, and (iii) the acquirer cited selling its carbide roughing tools to Contour’s customers as an integration benefit.

Case 10: A.L.M.T. and Esteves Group (September 2024) — An adjacent segment (wire-drawing dies)

In September 2024, A.L.M.T. (Allied Material), part of the Sumitomo Electric group, acquired all shares of Esteves Group (founded 1913) from Diamond Tools Group B.V. of the Netherlands. Esteves manufactures and sells diamond wire-drawing dies and extrusion tools for the wire and cable industry, with seven sites in six countries: Spain, Poland, the US, Mexico, China and Malaysia. This is a case in an adjacent segment of diamond tools rather than cutting tools.

A.L.M.T. cited the expansion of sales in Europe and North America and the strengthening of its global operations, and stated that it would combine the two companies’ diamond die products, technology, sales networks and service sites. The Esteves brand will continue to be used, and existing service and support arrangements will not change significantly.

This transaction shows that (i) in the same year as Case 9, a business held by the same Dutch holding company was acquired by a different Japanese group, and (ii) the acquirer targeted the target’s overseas sites and sales network and kept its brand and service arrangements.

Case 11: Kyocera and BFT and GSB (2023) — German carbide blade and drive makers

In May 2023, KYOCERA UNIMERCO Tooling (Denmark), Kyocera’s European subsidiary, signed an agreement to acquire all shares of BFT Hartmetall Werkzeuge (founded 1987) and GSB (founded 2018), both based in northern Hamburg. BFT makes carbide oscillating knives for the aerospace, automotive, packaging, textile and machinery industries, and GSB makes the drives used with those knives. The price was not disclosed. Kyocera cited the expansion of its capabilities through BFT’s and GSB’s expertise in oscillating cutting and a broader product range for customers.

This transaction shows that (i) a Japanese tool major acquired carbide tools for cutting materials used in industries such as packaging and textiles, and (ii) by acquiring both the blades and the drives, it obtained a product range combining tools with equipment.

6. Industry-Specific Factors Examined by Acquirers

In acquisitions of Japanese toolmakers and tool distributors, acquirers examine industry-specific factors in addition to financials. Based on the reasons and synergies disclosed by the parties in the cases above, these factors fall into three groups.

Products and technology — Which product segments and which workpieces the company’s technology serves. Acquirers have named specific technologies as the purpose of acquisitions: ultra-small-diameter single-crystal diamond tools (Case 3), grinding technology for diamond tools (Case 9) and oscillating cutting blades (Case 11). The acquirer in Case 2 cited the production technology and people the target had built up in manufacturing cutting tools.
Sales and service — Customer base, sales network, service capability such as regrinding, and complementarity with the acquirer’s products. The acquirer in Case 2 targeted companies with strong customer bases; the acquirer in Case 4 cited combined sales networks; and the acquirer in Case 10 cited overseas sales networks and service sites. In Case 8, regrinding capacity itself was the purpose of the acquisition. In Case 9, selling the acquirer’s products to the target’s customers was the stated integration benefit.
Raw materials and production — Procurement of tungsten and other raw materials, collection and recycling of used tools, and production equipment. Case 7 was an acquisition of raw-material and recycling capability itself; in Case 6, the seller cited smoother procurement through IMC’s scale and shared production systems as benefits; and the acquirer in Case 2 cited a wide range of production equipment.

7. Implications for Overseas Acquirers

Target universe

In Japan cutting tools M&A, the businesses that changed hands fall into two groups. The first is tool businesses within industrial groups for which tools were not a core business (Cases 1, 5 and 6). These were acquired by a Japanese tool major and by IMC. The second is non-listed manufacturers and distributors (Cases 2, 3 and 4), two of them held by individuals, acquired so far by a Japanese distributor and a Japanese tool major’s group company. Non-listed companies disclose limited information; identifying them requires research beyond public databases, and approaching them requires direct contact with owners or parent companies, in Japanese.

Transaction structures

The cases show several structures: a majority stake followed by full ownership (Case 1; planned in Case 2), a full share acquisition from individual shareholders (Case 4), a business transfer rather than a share acquisition (Case 3), and a joint venture in which the seller keeps a minority stake (Case 6). After acquisition, the target’s brand was kept in Cases 5, 6 and 10. The appropriate structure depends on the intentions of the parent company or owner and on the acquirer’s integration plan.

What sellers emphasize

The corporate sellers in these cases explained their decisions in terms of what the business needed. NGK Spark Plug cited scale, procurement, product range and development speed, and selected a partner able to provide them. MHT, the seller in Case 7, cited home-country regulations that constrained the business’s recycling strategy. In the NGK case, the seller’s statement suggests that it expected the acquirer to offer a path to growth for the business alongside the price. Owner-sellers in the cases did not publish their reasons; on the buyer side, Cominix linked its strategy explicitly to companies facing the absence of a successor (Case 2).

8. Syntax Partners

Syntax Partners is a Japan-based M&A advisory firm that acts solely as financial advisor. In any transaction, we advise one side only, either the buyer or the seller. We advise on Japan cutting tools M&A in both domestic and cross-border transactions.

Buy-side advisory

For foreign companies considering acquisitions or capital alliances in Japan, we support the full process: mapping targets based on their strategy, including non-listed owner-run companies and businesses within Japanese corporate groups; approaching owners and parent companies directly; negotiation; and execution. We work in Japanese and English, among other languages.

Sell-side advisory

As an advisor that maximizes the interests of sellers and owners, we support Japanese owners and parent companies considering a sale or business succession. The buyer universe we cover includes not only Japanese toolmakers but also tool distributors, adjacent-industry companies and overseas strategic buyers. Our transaction support draws on our understanding of the industry, including customer relationships by product segment, regrinding and other services, raw-material procurement and the collection of used tools.

Selected engagements are listed in our Track Record.

We welcome discussions at any stage, from early-stage exploration of acquisitions or partnerships in Japan to live transactions.

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This article was prepared by Syntax Partners, Inc. based on public information, including companies’ official announcements and IR materials.

Japan Cutting Tools M&A: Tungsten Constraints, Carve-Outs From Industrial Groups and Foreign Ownership