According to the company’s website news release on 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
- 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.
- 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.
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
Timeline
December 26, 2022 Execution of basic agreement
Late May 2023 (planned) Execution of definitive agreement
April 1, 2024 (planned) Closing
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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Published on December 30, 2022 9:53 AM (GMT+8)Last Updated on December 30, 2022 9:53 AM (GMT+8)
