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|Hitachi, Ltd., Fuji Electric Co., Ltd. and Meidensha
Substation Systems Businesses to Japan AE Power Systems Corporation by the
Separation of Related Units.
Tokyo, May 23, 2002, --- Hitachi, Ltd. (TSE:6501/NYSE:HIT), Fuji Electric Co., Ltd. (TSE:6504) and Meidensha Corporation (TSE:6508) announced today that they have agreed to transfer their substation businesses to Japan AE Power Systems Corporation by separating each related business units. The three companies' substation businesses comprise such operations as transformers, circuit breakers and switching devices. Japan AE Power Systems is a joint venture established by the three companies.
The substation market continues on its course of rapid change driven
by liberalization and deregulation of the electric power industry
in Japan. In Japanese market, the level of capital investment by the
electric power companies is held low, affected by on-going electric
power industry liberalization.
In overseas markets, although electric power demands in the Southeast Asia and China and the power retail market is growing there, the market climate with the leading overseas makers is getting very competitive.
Hitachi, Fuji Electric and Meidensha entered into a comprehensive strategic alliance covering development, manufacture and service in the transmission and distribution business in January 2001, with the goals of: (1) strengthening the competitiveness of the product offerings, (2) accelerating the new product development process through the synergy of each leading-edge technologies and (3) developing the overseas businesses. As part of the alliance, the three companies established Japan AE Power Systems in July 2001. Japan AE Power Systems reinforced its product offering by taking advantage of the excellent engineering resources of three companies and embarked on the development of overseas business operations by opening new offices in Shanghai and Singapore.
To survive in the increasingly competitive substation market, the three companies will continue to refine business operation style and financial strength of Japan AE Power Systems. Specifically, the three companies agreed to separate its related business units to the Japan AE Power Systems by applying a provision of the recently enacted more simplified separation act under the commercial laws in Japan.
Japan AE Power Systems has to realize the timely product development and timely production by effectively allocating the resources currently scattered across the three companies' related production bases. By integrating and consolidating its product offerings and production lines and by managing more efficiently, Japan AE Power Systems aims to be a leading company in the global transmission and distribution market.
By transferring operations to Japan AE Power Systems, Hitachi, Fuji Electric and Meidensha hope Japan AE Power Systems will deliver the stable profitability in the transmission and distribution sector, maintain the leading position in the market and continue its offering of the high quality and reliable products for the benefit of its customers.
4.Three companies' status after the separation of its related business units
5.Profile of Japan AE Power Systems Corporation (following transfer)
|Information contained in this news release is current as of the date of the press announcement, but may be subject to change without prior notice.|
|WRITTEN BY Corporate Communications Division