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Hitachi and Mitsubishi Heavy Industries merge thermal power businesses
- 12 years ago (2012-12-01)
- David Flin
Japanese conglomerates Hitachi and Mitsubishi Heavy Industries (MHI) have agreed to form a joint venture that will integrate their thermal power generation businesses. MHI will own a 65 per cent stake, and Hitachi will own a 35 per cent stake in the joint venture, which will be formed by 1 January, 2014. The merged entity will manufacture gas turbines, boilers, and fuel cells, among others, and is expected to generate Ɏ1.1 trillion in annual sales.
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MHI manufactures large gas turbines, while Hitachi concentrates on small and medium gas turbines. Geographically, MHI has a strong presence in Southeast Asia and the Middle East, while Hitachi has a strong presence in Europe and Africa.
Hitachi and MHI generated revenues of $10.1 billion and $11.6 billion respectively in the fiscal year ended in March from their power systems units that include wind, hydroelectric, and nuclear power generation systems, in addition to thermal systems.
The new entity is intended to tap the rising demand for electricity generating equipment from China and other emerging Asian countries. The companies said in a statement: “Through this agreement, MHI and Hitachi will develop a stable and efficient management base for the new company, while accelerating global business expansion by pursuing synergies through business integration. At the same time, the two companies will make the most of their collective capabilities, along with synergies and complementary strengths in technologies and product businesses.”
Further terms of the merger will be determined later by the execution of the final agreement, which is expected in late April 2013.