Mitsubishi Heavy Industries and Hitachi have announced that they have reached a basic agreement on integrating businesses in fields centred on thermal power generation systems, and jointly managing these operations. Its main aim is to help the two companies deal with the realities of intensifying global competition.
The two companies plan to integrate this business by consolidating their respective operations in thermal power generation systems within a joint venture company by January 1, 2014. MHI and Hitachi will take equity interests of 65% and 35%, respectively, in new company.
The global market has continued to expand, driven by the growth engines of China and other emerging countries. Heightened environmental awareness around the world has presented a major opportunity for MHI and Hitachi to expand businesses where they both excel – businesses that solve global energy and environmental issues at the same time, the companies said in a joint statement. These sources of buoyant demand require that companies respond in detail, based on highly advanced technologies, quality and reliability, unfettered by the traditional frameworks of company structure. In this regard, they must be able to harness engineering and service capabilities closely tied to each region.
The two companies have already established partnerships harnessing their technical capabilities and experience in a number of fields. Examples include an alliance and subsequent establishment of a joint venture in the steel production machinery field, collaboration in the overseas railway systems business; and the integration of the hydroelectric power generation system business.
A basic agreement on business integration to address buoyant global demand for thermal power generation systems has been reached. The integration process will see the two companies rapidly co-organise an integration preparation committee, to oversee the operation.
In the thermal power generation field, the two companies both have long product lineups, in particular MHI's range of high efficiency large gas turbines and Hitachi's range of small and medium-sized models. Regionally, MHI has strengths mainly in Southeast Asia and the Middle East, while Hitachi's are in markets such as Europe and Africa. The aim is to establish a leading global company in the thermal power generation systems field. Further details of the new company's structure and competences will be reported as they emerge.
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