TIDMMEL
RNS Number : 9645K
Mitsubishi Electric Corporation
26 December 2022
Mitsubishi Electric and Mitsubishi Heavy Industries Reach a
Basic Agreement to Start Detailed Studies for Business Integration
for Power Generator Systems
TOKYO, December 26, 2022 - Mitsubishi Electric Corporation
(TOKYO: 6503, "Mitsubishi Electric") and Mitsubishi Heavy
Industries, Ltd. (TOKYO: 7011, "Mitsubishi Heavy Industries")
announced today that the two companies have reached a basic
agreement to establish a joint venture to integrate their
businesses in fields focused on power generator systems.
It is expected that Mitsubishi Electric will be the majority
shareholder and Mitsubishi Heavy Industries will be the minority
shareholder of the new company.
Climate change caused by global warming has emerged as a common
issue worldwide, and efforts to achieve carbon-neutrality, which
would reduce greenhouse gas emissions to net zero, are accelerating
around the world.
Electricity demand is expected to increase due to economic
growth mainly in emerging countries and awareness of energy
security, and energy transitions has increased. In the future,
existing thermal power generation will decarbonize its systems with
fuel conversion to hydrogen, ammonia, and other carbon-free
fuels.
Large-scale power plants that have supported the power
infrastructure so far will play an important role as a force to
adjust for the increase in variable renewable energy sources, whose
power generation is affected by weather and other factors.
Considering this market environment, Mitsubishi Electric and
Mitsubishi Heavy Industries have reached this basic agreement to
strengthen their market competitiveness further by integrating
their respective businesses and combining their respective
technologies and assets. This business integration will create a
stronger partnership than ever before and expand the two companies'
power generator systems on a global scale, thereby contributing to
the realization of a carbon-neutral society.
An overview of this business integration is described in the
Appendix. Further details will be announced as they become
available.
Media inquiries
Mitsubishi Electric Corporation
Public Relations Division
prd.gnews@nk.MitsubishiElectric.co.jp
Mitsubishi Heavy Industries, Ltd.
Corporate Communication Department
mediacontact_global@mhi.com
Overview of Business Integration
(1)Scope of the business integration
The scope of the integration will include basic planning,
design, development, manufacturing, sales and servicing of power
generators connected directly to turbines, as well as other key
facilities at power generation plants.
(2)Measure of integration
Businesses subject to the integration will be transferred to a
new joint venture company from Mitsubishi Electric and Mitsubishi
Heavy Industries separately, each by way of an absorption-type
company split. The terms and conditions of the integration will be
determined by Mitsubishi Electric and Mitsubishi Heavy Industries
in the definitive agreement on the integration.
(3)Overview of the parties to the integration
Company name Mitsubishi Electric Mitsubishi Heavy Industries,
Corporation Ltd.
Head Office 2-7-3 Marunouchi, Chiyoda-ku, 3-2-3 Marunouchi, Chiyoda-ku,
Tokyo Tokyo
---------------------------------- -------------------------------
Representative Kei Uruma Seiji Izumisawa
Representative Executive President & CEO
Officer,
President & CEO
---------------------------------- -------------------------------
Summary of Business Development, manufacturing, Major products and operations:
sales, and service of Energy Systems, Plants
products such as Infrastructure, & Infrastructure Systems,
Industry and Mobility, Logistics,
Life and Business Platform Thermal & Drive Systems,
Aircraft, Defense &
Space
---------------------------------- -------------------------------
Established January 15, 1921 January 11, 1950
---------------------------------- -------------------------------
Paid-in Capital 175,820 million yen 265,608 million yen
(as of March 31, 2022) (as of March 31, 2022)
---------------------------------- -------------------------------
Shares Issued 2,147,201,551 shares 337,364,781 shares
(as of March 31, 2022) (as of March 31, 2022)
---------------------------------- -------------------------------
Book Closing Date March 31 March 31
---------------------------------- -------------------------------
Major Shareholders The Master Trust Bank The Master Trust Bank
and of Japan, Ltd. (Trust of Japan, Ltd. (Trust
Shareholding Account): 16.91% Account): 15.61%
Ratio SSBTC CLIENT OMNIBUS Custody Bank of Japan,
ACCOUNT: 5.03% Ltd. (Trust Account):
Custody Bank of Japan, 5.06%
Ltd. (Trust Account): Meiji Yasuda Life Insurance
4.63% Company: 2.37%
(as of March 31, 2022) (as of March 31, 2022)
---------------------------------- -------------------------------
Operating Results for the Most Recent Business Year and Financial
Positions as of the End of the Business Year
(FY ended March 2022)
Total Equity 3,097,397 million yen 1,662,529 million yen
---------------------------------- -------------------------------
Total Assets 5,107,973 million yen 5,116,340 million yen
---------------------------------- -------------------------------
Equity Attributable 1,409.08 yen 4,696.42 yen
to
Shareholders per
Share
---------------------------------- -------------------------------
Revenue 4,476,758 million yen 3,860,283 million yen
---------------------------------- -------------------------------
Operating Profit 252,051 million yen -
---------------------------------- -------------------------------
Profit from Business - 160,240 million yen
Activities
---------------------------------- -------------------------------
Profit Before 279,693 million yen 173,684 million yen
Income Taxes
---------------------------------- -------------------------------
Net Profit Attributable 203,482 million yen 113,541 million yen
to Shareholders
---------------------------------- -------------------------------
Basic Earnings 95.41 yen 338.24 yen
per Share Attributable
to Shareholders
---------------------------------- -------------------------------
(4) Overview of the new joint venture company
It is expected that Mitsubishi Electric will be the majority
shareholder and Mitsubishi Heavy Industries will be the minority
shareholder of the new company. Details of the new joint venture
company, including the investment ratio, will be decided through
due diligence and further discussions.
(5) Timeline
December 26, 2022 Execution of basic agreement
Late May 2023 (planned) Execution of definitive agreement
April 1, 2024 (planned) Closing
* Implementation of the planned business integration is
conditional upon obtaining clearances, approvals and/or completion
of processes required from and by any relevant government
agencies
and competition authorities.
** Since both absorption-type company splits of Mitsubishi
Electric and Mitsubishi Heavy Industries constitute simple
absorption-type splits as set forth in Article 784, Paragraph 2 of
the Companies Act of Japan, it is not expected that approvals of
shareholders' meetings will be required at Mitsubishi Electric or
Mitsubishi Heavy Industries.
(6) Outlook
The impact of the business integration on the business results
of Mitsubishi Electric and Mitsubishi Heavy Industries will be
announced when it becomes clear
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END
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December 28, 2022 02:00 ET (07:00 GMT)
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