Hitachi to sell global home appliances business to Turkey's Arçelik
29 December 2020
Hitachi Global Life Solutions has announced plans to sell 60 per cent stake in its global home appliances business (excluding Japan) to Turkey’s Arcelik AS, for a transaction value of around $300 million on a cash-free and debt-free basis.
As part of the transaction, Hitachi GLS will establish a new company into which it will transfer its global home appliances business outside of Japan. Arçelik will acquire 60 per cent ownership in the new company, which both partners aim to establish in the spring of 2021, subject to regulatory approvals and satisfaction of other customary conditions
Hitachi said the deal is subject to customary adjustments based on the balance of net debt, net working capital of the company, and minority shares adjustment for the outstanding minority shares as of the closing date.
Arcelik will be selling products under the Hitachi brand in order to cash in on te Japanese company’s brand value and create a major player in Asia-Pacific - the world's largest home appliances market - and tp expand globally.
Arçelik and Hitachi GLS plan to build a competitive value chain leveraging the complementarity of both companies' strategies and create growth opportunities that will increase their access to new markets, enhance their product ranges and sales capabilities, while delivering increased competitiveness across supply chain and production operations.
Arçelik hopes to expand the new home appliance business to over 145 countries it currently markets products. The company claims substantial market share in Europe and South Asia.
Hitachi GLS currently operates its home appliance business mainly in Southeast Asia and the Middle East, where it enjoys a high-end brand image.
The joint venture will manufacture, sell and provide after-sales services of Hitachi branded home appliances (including refrigerators, washing machines, vacuum cleaners etc.) globally outside of the Japanese market.
The joint venture encompasses twelve Hitachi GLS group companies outside Japan (two manufacturing companies, ten sales companies) and approximately 3,800 employees. The portfolio generates a revenue of over JPY100 bn in sales (approximately $1.0bn). Leveraging the sales network of Arçelik and Hitachi GLS, the joint venture will expand the sales of Hitachi branded products in Europe, South Asia and Africa as well as South East Asia and the Middle East.
In addition, Arçelik and Hitachi GLS will combine expertise in key areas such as R&D, procurement and production systems, in order to optimize the joint venture's global supply chain and strengthen its competitive positioning in the market.
"This joint venture is another significant achievement in our Silk Road strategy. The Asia-Pacific home appliances market offers a strong growth owing to a rise in the middle-class population, developing retail channels, an increase in the household income and developing lifestyles. We will combine our global expertise, with the strong market position and brand heritage of Hitachi to grasp the global and local market needs," Fatih Kemal Ebiçlioglu, president, consumer durables group of Arçelik's parent company KOC Holdings, said.
"Through the establishment of this joint venture, we look forward to contributing to the improvement of people's quality of life (QoL) by delivering Hitachi branded home appliances to broader areas," Keiji Kojima, executive vice president and executive officer, Hitachi Ltd, the parent company of Hitachi GLS, said.
With 32,000 employees throughout the world, 12 brands (Arçelik, Beko, Grundig, Blomberg, ElektraBregenz, Arctic, Leisure, Flavel, Defy, Altus, Dawlance, Voltas Beko), sales and marketing offices in 34 countries, and 22 production facilities in 8 countries, Arçelik is Europe's second largest white goods company by market share.
Arçelik reached a consolidated turnover of 5 billion Euros in 2019. With almost 70 per cent of its revenues coming from international markets.
Headquartered in Tokyo, Japan, Hitachi Global Life Solutions Inc delivers well-designed functional products and sophisticated solutions to suit individual customer lifestyles.