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TOKYO, Japan, April 18, 2002 -- Hitachi, Ltd. (TSE: 6501, NYSE: HIT,
"Hitachi") and UNISIA JECS CORPORATION (TSE: 7275, "UNISIA JECS")
today announced that in accordance with a memorandum of understanding
signed by their respective boards of directors, Hitachi, Ltd. will
make UNISIA JECS a wholly owned subsidiary through an exchange of
shares. The transaction is being made to strengthen the companies'
automotive products businesses.
Hitachi currently holds 16.7% of UNISIA JECS ' equity. Integrating
their operations will enable the two companies to implement speedy
and effective development of the business, further strengthening their
competitiveness in the growing automotive products business.
The share exchange agreement will be concluded towards the end of
May 2002, and, upon approval at Unisia Jecs' ordinary general meeting
of shareholders, which is scheduled to take place in late June, the
share exchange transaction is expected to take place on October 1,
2002. Also on October 1, UNISIA JECS will change its corporate name
to Hitachi-Unisia Automotive, Ltd. As a result of the share exchange,
shares of UNISIA JECS will be delisted as of September 25, 2002.
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| 1. Gist of the agreement |
The Hitachi Group's goal is to be a global supplier
able to provide comprehensive solutions based on information systems
services and social infrastructure systems. Hitachi is implementing
a consolidated management policy that includes reorganization
of businesses, alliances, mergers and acquisitions. This will
ensure that subsidiaries engaged in core hardware and other business
areas essential to this goal, are wholly-owned members of the
Hitachi Group.
The purpose of making UNISIA JECS a wholly owned subsidiary is
to further expand the automotive products business. This encompasses
solutions for enhancing comfortable and convenient life, and ecologically
green solutions, where the Hitachi Group has set its strategic
targets.
With UNISIA JECS as a wholly owned subsidiary, the Hitachi Group
can combine technology related to basic automotive functions,
such as braking and steering, with Hitachi's motor actuator and
engine control technology and cutting-edge IT and electronics
technologies, which is needed to enter the ubiquitous information
society. In areas ranging from fuel cells, electric automobiles,
hybrid cars and other environmentally-friendly power-train technologies
to integrated vehicle control and telematics services, advanced
technologies will be indispensable to automobiles in the ubiquitous
information society. This transaction will make it possible for
the Hitachi Group to meet the future needs of the automotive industry
in its quest for new technologies that combine mechatronics, electronics
and IT.
The Hitachi Group will also use this transaction as an opportunity
to further strengthen the automotive parts business through its
R&D and financial capabilities, personnel deployment and automotive
business. |
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| 2. The advantages of making UNISIA JECS a wholly
owned automotive-parts subsidiary |
Engine control equipment, electric vehicle drive
systems, on-board information devices (electronic toll collection
(ETC) systems and vehicle information and communication systems
(VICS)) and electrical equipment for vehicles are just some of
the automotive product areas in which the Hitachi Group is involved.
In recent years, the group has been expanding operations in a
number of other important sectors. These include electric power-trains
and low-emission engines, which relate to the environment, adaptive
cruise control systems; electric brakes, which relate to safety
and driving comfort; and information-related products, such as
car navigation and telematics systems.
A broad-based development of operations is under way, covering
the car navigation and telematics business of Xanavi Informatics
Corporation (which became a wholly-owned subsidiary in December
2000) to the Semiconductor & Integrated Circuits Group's automotive
semiconductor business, as well as materials, functional parts,
infrastructures and solutions of many other business groups and
affiliated companies.
UNISIA JECS manufactures automotive systems and components that
underpin every area of basic vehicle function: engine, drive train,
suspension, steering and brakes. It has advanced technology for
combining mechanical, hydraulic and electronic control systems,
and application engineering to vehicles. In recent years, amid
an increasing emphasis on environmental conservation and safety,
UNISIA JECS has been expanding operations in the areas of Valve
Timing Control systems (VTC), steering systems and brake systems.
In April 1999, Hitachi took an equity position in UNISIA JECS
as part of an alliance between the two companies relating to vehicle
control in an Intelligent Transport System (ITS). Since then,
UNISIA JECS has been a valuable partner in the automotive parts
business, working with Hitachi on the joint development and marketing
of a number of products, including engine control equipment and
the new area of adaptive cruise control systems.
With UNISIA JECS as a wholly owned subsidiary, the Hitachi Group
can combine Hitachi's sensor-based information verification and
advanced electronic control technologies with UNISIA JECS ' world-class
brake and steering technologies and application engineering to
vehicles. This will greatly enhance the group's competitiveness
in such areas as electric brake products and adaptive cruise control
systems.
In some areas such as engine control equipment where there is
some overlap between the two companies' operations, it will be
possible to increase efficiency by concentrating investment in
development and centralizing production equipment, thus strengthening
engineering capabilities and boosting cost-competitiveness.
As a leading presence in automotive areas relating to ecology,
safety, driving comfort and information systems, the Hitachi Group
will be able to develop and provide products that combine enhanced
automotive functionality with convenience.
Looking to the future, to expand this area of operations and become
more competitive, the two companies will focus on making effective
use of their domestic and international networks, as well as on
building an optimized business system, including through alliances
inside and outside the Hitachi Group, that will enable them to
provide solutions that meet customers' requirements. |
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