Hitachi, Mitsubishi plan merger of infrastructure businesses
04 August 2011
Japanese industrial giants Hitachi Ltd and Mitsubishi Heavy Industries Ltd are planning to merge in what would be the largest merger in the country's history and lead to the formation of one of the world's largest infrastructure companies with combined sales of nearly $150 billion.
If the deal goes ahead, the combined company would become one of the world's largest global firms in a number of key sectors, several foreign and domestic media reported late last night.
Hitachi, Japan's biggest industrial electronics firm, with a market value of $27 billion and a turnover of $112 billion last year and projected turnover of 9.5 trillion yen (approximately $122 billion) for the current financial year, makes products ranging from rice cookers, televisions to excavators, elevators, computer chips, nuclear, thermal and hydroelectric power plants.
Mitsubishi Heavy Industries Ltd, with an annual turnover of $37 billion, is Japan's leading heavy machinery maker, nuclear operator, aircraft builder, shipbuilder, defense contractor, and a leading company in the Japan's aerospace industry.
This would be the second big industrial merger in Japan announced this year after Japanese steelmakers, Nippon Steel and Sumitomo Metal Industries Ltd. agreed in February to merge to become the world's second-largest steel producer. (See: Nippon Steel, Sumitomo Metal to merge)
But unlike Western companies, which announce a merger close to finalising the deal, Japanese companies first announce plans of starting merger talks and complete the deal in the distant future, with most failing to consummate.
Therefor, with talks at an early stage, it remains to be seen whether the two industrial heavyweights can arrive at a final agreement.