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Hitachi to Restructure Power Plant, Transportation System and Industrial Plant Construction Businesses Through Company Split

Tokyo, June 28, 2013 --- Hitachi, Ltd. (TSE: 6501 / “Hitachi”) today announced that it has decided to transfer its construction business for power plant, transportation system and industrial plant and integrate them in Hitachi Plant Engineering & Services, Ltd. (“Hitachi Plant Engineering & Services”), a wholly owned subsidiary on October 1, 2013. The purpose of this restructuring is to strengthen and expand the infrastructure systems business. Hitachi will use a company split to transfer its construction and construction engineering business for power plants, transportation systems and industrial plants as well as design, manufacturing and construction business for dust collection systems to Hitachi Plant Engineering & Services. In conjunction with this restructuring, Hitachi Plant Engineering & Services will be renamed Hitachi Plant Construction, Ltd. (tentative name). Certain disclosures and details have been omitted as this transaction is the company split transferring businesses from Hitachi to its wholly owned subsidiary.

1. Purpose of Company Split

In recent years, investment in social and industrial infrastructure systems has increased on a global scale. At the same time, infrastructure must now be more advanced to both support economic development and the creation of a low-carbon society. In emerging countries in particular, rapid population growth, economic expansion and other developments are driving much higher demand for social infrastructure such as large-scale urban development, energy, transportation and water systems, in addition to industrial infrastructure, including industrial parks and natural resource development.

Hitachi is accelerating global development of its Social Innovation Business to solve issues facing society and customers through innovative solutions combining products, services and highly sophisticated IT. As part of this drive, in April 2013 Hitachi merged wholly owned subsidiary Hitachi Plant Technologies, Ltd., which had globally engaged in various businesses including manufacturing of large pumps, compressors and other components, EPC* for water treatment systems, air conditioning systems, chemical and pharmaceutical plants, and construction of power plants, transportation systems and other large plants.

In order to develop these efforts, by integrating Hitachi’s engineering capabilities including construction design and construction management for large-scale plants and Hitachi Plant Engineering & Services’ construction abilities, it is anticipated to create a business structure with outstanding technical abilities and competitiveness. The integration is expected to strengthen Hitachi’s capabilities for providing solutions for large-scale infrastructure systems, such as power plants, transportation systems and smart cities. It is also aimed at winning more orders in Japan and overseas.

*EPC: Engineering, Procurement and Construction

2. Outline of the Company Split

(1) Company Split Schedule


Execution of Company Spilt Agreement

August 2013 (Tentative)

Scheduled Company Spilt Date (Effective Date)

October 1, 2013 (Tentative)

* The company split is deemed to be a simple absorption-type company split at Hitachi, pursuant to Article 784, Paragraph 3 of the Companies Act of Japan, and a short-form absorption-type company split at Hitachi Plant Engineering & Services, pursuant to Article 796, Paragraph 1 of the Companies Act of Japan. Therefore, Hitachi and Hitachi Plant Engineering & Services do not plan to convene shareholders’ meetings to obtain approval for the company split agreement.

(2) Company Spilt Method

This is an absorption-type split in which Hitachi is the transferring company and Hitachi Plant Engineering & Services is the successor company.

(3) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition Rights Accompanying the Company Split

Hitachi has no outstanding stock acquisition rights or bonds with stock acquisition rights.

(4) Capitalization Changes Accompanying the Company Split

The company split will result in no change in capitalization of Hitachi.

(5) Outlook on Performance of Obligations

Obligations of Hitachi Plant Engineering & Services becoming due after the effective date of the company split are anticipated to be duly performed.

(6) Others

Other details on the company split will be announced when they are determined.

3. Profile of the Parties of the Company Split




Transferring Company

Successor Company


Hitachi, Ltd.

Hitachi Plant Engineering & Services, Ltd.

Head Office

6-6, Marunouchi 1-Chome,

Chiyoda-ku, Tokyo

1-3, Higashi-Ikebukuro 3-Chome,

Toshima-ku, Tokyo


Hiroaki Nakanishi,


Nobuho Goto,



Development, manufacture and sales of products and provision of service across 10 segments:

Information & Telecommunication Systems, Power Systems, Social Infrastructure & Industrial Systems, Electronic Systems & Equipment, Construction Machinery, High Functional Materials & Components, Automotive Systems, Digital Media & Consumer Products, Financial Service, Others

Construction and construction services for power plants and industrial plants


458,790 million yen

(As of March 31, 2013)

120 million yen

(As of March 31, 2013)


February 1, 1920

April 16, 1964

Number of issued shares


(As of March 31, 2013)


(As of March 31, 2013)

Fiscal year end

March 31

March 31

Major shareholders and shareholding

- The Master Trust Bank of Japan, Ltd. (Trust Account) 6.52%

- Japan Trustee Services Bank, Ltd. (Trust Account) 5.77%


- Hitachi Employees’ Shareholding Association 2.57%

- State Street Bank and Trust Company 505224 2.18%

(As of March 31, 2013)

Hitachi, Ltd. 100%

Financial conditions and business results for the most recent fiscal year

(Millions of yen unless otherwise specified)

Net assets

3,179,287 (Consolidated)

3,700 (Unconsolidated)

Total assets

9,809,230 (Consolidated)

10,267 (Unconsolidated)

Net assets per share (yen)*1

431.13 (Consolidated)

30,835 (Unconsolidated)


9,041,071 (Consolidated)

19,593 (Unconsolidated)

Operation income

422,028 (Consolidated)

630 (Unconsolidated)

Ordinary income*2

344,537 (Consolidated)

641 (Unconsolidated)

Net income*3

175,326 (Consolidated)

290 (Unconsolidated)

Net income per share (yen)*3

37.28 (Consolidated)

2,423.76 (Unconsolidated)

*1 Since Hitachi has been adopting U.S. accounting standards, this figure represents stockholders’ equity per shares.

*2 Since Hitachi has been adopting U.S. accounting standards, this figure represents income before income taxes.

*3 Since Hitachi has been adopting U.S. accounting standards, these figures represent net income attributable to Hitachi, Ltd. stockholders and net income attributable to Hitachi, Ltd. stockholders per share basic, respectively.

4. Overview of the Business to Be Transferred

(1) Business of the Business to Be Transferred

Construction and construction engineering for power plants, transportation systems and industrial plants as well as design, manufacturing and construction for dust collection systems

(2) Others

Other details concerning the business to be transferred will be announced as they are decided.

5. Status of Succeeding Company after Transfers


(1) Name

Hitachi Plant Construction, Ltd. (tentative name)

(2) Headquarters

1-3, Higashi-Ikebukuro 3-Chome,Toshima-ku, Tokyo

(3) Representative

Nobuho Goto,


(4) Business

Construction, construction engineering and construction services for power plants, transportation systems and industrial plants as well as design, manufacturing and construction for dust collection systems

(5) Capital

(Not yet determined)

(6) Fiscal year end

March 31

6. Status of Hitachi After the Company Split

There will be no change in the company name, head office location, representative’s position or name, business activities, capital or fiscal year of Hitachi due to the company split.

7. Outlook

The company split will have no impact on the consolidated operating results of Hitachi.

(Reference) Consolidated Business Forecasts for the Year Ending March 31, 2014 (announced on May 10, 2013) and Consolidated Operating Results for the Previous Fiscal Year



Operating Income

Income Before Income Taxes

Net Income Attributable to Hitachi, Ltd. Stockholders

Consolidated Business Forecasts for Fiscal 2013 (Year ending March 31, 2014)





Consolidated Operating Results for Fiscal 2012

(Year ended March 31, 2013)





About Hitachi, Ltd.

Hitachi, Ltd. (TSE: 6501), headquartered in Tokyo, Japan, is a leading global electronics company with approximately 326,000 employees worldwide. The company’s consolidated revenues for fiscal 2012 (ended March 31, 2013) totaled 9,041 billion yen ($96.1 billion). Hitachi is focusing more than ever on the Social Innovation Business, which includes infrastructure systems, information & telecommunication systems, power systems, construction machinery, high functional material & components, automotive systems and others.

For more information on Hitachi, please visit the company's website at

Cautionary Statement

Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify “forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.

Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:

• economic conditions, including consumer spending and plant and equipment investment in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levels of demand in the major industrial sectors Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;

• exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;

• uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing;

• uncertainty as to general market price levels for equity securities, declines in which may require Hitachi to write down equity securities that it holds;

• the potential for significant losses on Hitachi’s investments in equity method affiliates;

• increased commoditization of information technology products and digital media-related products and intensifying price competition for such products, particularly in the Digital Media & Consumer Products segment;

• uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technologies on a timely and cost-effective basis and to achieve market acceptance for such products;

• rapid technological innovation;

• the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which Hitachi uses the percentage-of-completion method to recognize revenue from sales;

• fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components;

• fluctuations in product demand and industry capacity;

• uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rates and/or price of raw materials or shortages of materials, parts and components;

• uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business;

• uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness;

• uncertainty as to the success of cost reduction measures;

• general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi conducts business, particularly Japan, Asia, the United States and Europe, including, without limitation, direct or indirect restrictions by other nations on imports and differences in commercial and business customs including, without limitation, contract terms and conditions and labor relations;

• uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;

• uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;

• uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties;

• the possibility of incurring expenses resulting from any defects in products or services of Hitachi;

• the possibility of disruption of Hitachi’s operations by earthquakes, tsunamis or other natural disasters;

• uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s ability to protect its confidential information or that of its customers;

• uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its significant employee benefit-related costs; and

• uncertainty as to Hitachi’s ability to attract and retain skilled personnel.

The factors listed above are not all-inclusive and are in addition to other factors contained in other materials published by Hitachi.

Press Contacts


Mickey Takeuchi

Hitachi America, Ltd.



Keisaku Shibatani

Hitachi, Ltd.


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