Tokyo, Japan, March 29, 2001 -- Hitachi, Ltd. (TSE: 6501) today
announced that, to render its operations more capable of responding
rapidly to market changes and to bolster its competitive strength
in the marketplace, it had decided to divest its Industrial Machinery
Systems Division, the core of the company's industrial machinery business,
and merge it with Hitachi Techno Engineering Co., Ltd., which is at
the core of the company's after-sales services for industrial machinery,
and also plays a central role in the production and sale of production
facilities and machinery for the manufacture of electronic equipment.
The corporate name of the merged company will become Hitachi Industries
Co., Ltd. (provisional name) as of October 1, 2001.
The new company will be headquartered in Adachi Ward,
Tokyo, with its principal production facilities being the Tsuchiura
Production Headquarters of the Industrial Machinery Systems Division
and the Ryuugasaki work belonging to Hitachi Techno Engineering.
The provisions of the corporate split system as stipulated
in the revisions to Japan's Commercial Code, which go into effect
on April 1, 2000, will apply to this merger.
The industrial machinery market is characterized by the need for swift
operational behavior and speedy decision making as competition intensifies
still further in global markets and customer needs change, with increasing
demand for replacement facilities and machinery, as well as for enhanced
efficiency. Until now in the Hitachi Group, Hitachi itself has been
responsible for the development and production of compressors and
fans, pumps, refrigerating machinery and transmissions and Hitachi
Techno Engineering for after-sales service and maintenance.
In response to the above-mentioned changes in the market,
with this merger Hitachi will unify its industrial systems business
end-to-end, from product development to after-sales service, and aims
to speed up decision making, develop products and systems more closely
tailored to market needs as well as enhance the efficiency of its
operations, both domestically and internationally. The new company
will improve the competitiveness of its products, including their
price competitiveness, in the global market, and endeavor to bolster
its product-related service operations.
The bringing together of Hitachi's accumulated technological and solutions
provision capabilities in fields such as fluid machinery and refrigerant
systems with the after-sales service know-how of Hitachi Techno Engineering
will ensure that the new company can deliver products, systems and
solutions that match market needs more. In addition to its traditional
industrial machinery business, the new company will move aggressively
to develop new service businesses ahead of the competition in such
areas as product leasing, utility service and comprehensive facilities
and machinery maintenance contracts.
The new company aims to strengthen Hitachi Techno Engineering's
environmental engineering business and electronic equipment manufacturing
machinery business, which has until now been engaged in the production
of high-density substrate packages and LCD panels. The new company
will treat them as strategic businesses and pursue synergies that
arise from the merger, through the effective utilization of the management
resources of both companies.
The provisions of the corporate split system relating to the absorption
of a divested company, which go into effect on April 1, 2001, apply
to this merger. Hitachi will transfer the operations of its Industrial
Machinery Systems Division to Hitachi Techno Engineering, and, in
return, Hitachi Techno Engineering will issue 1.55 million shares
of common stock with a par value of 500 yen, each which will be allotted
to Hitachi. The number of new stocks to be issued was decided with
reference to the results of an assessment carried out by an independent
third party so that Hitachi could assess fairly and objectively the
value of the business which it was divesting.
Outline of New Company
||Hitachi Industries Co., Ltd. (provisional)
||1. Manufacture, installation, and maintenance
of industrial machinery systems and after-sales service for them
2. Production and sale of electronic equipment manufacturing machinery,
other engineering, etc.
||5 billion yen(100% owned by Hitachi)
||Hidenao Mizuta (provisional)
|Date of transaction
||October 1, 2001
||Nakagawa 4-13-17, Adachi-ku, Tokyo
||Approximately 2,100 (est. as of October
||90 billion yen(est. for fiscal 2001)