Hitachi and Toyo Denki Seizo Agree on Strategic Alliance in Electrical Components for Rolling Stock in Overseas Markets
Tokyo, October 25, 2010 --- Hitachi, Ltd. (NYSE: HIT / TSE: 6501, “Hitachi”) and Toyo Denki Seizo K.K. (TSE: 6505, “Toyo Denki Seizo”) today announced that they have entered into an agreement on strategic alliance in electrical components for rolling stock in overseas markets. Hitachi and Toyo Denki Seizo aim to strengthen their global competitiveness and expand their business outreach through this strategic alliance. The two companies will cooperate in projects outside Japan by sharing system integration work as well as by supplying each other’s products in which they have strengths. In order to strengthen their cooperative relationship, Hitachi and Toyo Denki Seizo will hold equity shares of each other.
The market for infrastructure such as power systems and railway systems is expected to expand, particularly so in emerging countries and regions. In developed countries and regions which already have a certain level of such infrastructure, there is increasing demand for upgrades using advanced information and telecommunication systems technology.
Railways are winning increasing recognition as mass transportation systems with less environmental impact, or so-called “green mobility”. As a result, many regions around the world including Europe, Asia, Middle East and Americas are increasingly seeking to build new railway systems, extend existing ones or upgrade them for higher speed. In particular, the demand for electrical components such as drive systems, with their major contribution to improved efficiency and reliability, is expected to grow not only for new construction of railway systems but also for extensions and upgrades.
Hitachi and Toyo Denki Seizo each possess cutting-edge technology and expertise in electrical components for rolling stock (drive systems including converters/inverters, and auxiliary power supply) and related systems. Through their long history and relationship with railway operators in Japan, they have earned a high level of trust both domestically and overseas for their drive systems. While Hitachi has strengths in AC control and drive systems for high-speed rail, Toyo Denki Seizo excels in DC control and drive systems and mechanical equipment such as pantographs and driving gear units.
This strategic alliance announced today was agreed based on the companies’ proven track records in order to meet the growing market needs with greater strength and capability. Hitachi and Toyo Denki Seizo plan to leverage their resources in systems integration and to supply products to each other for projects outside Japan. The two companies will look into joint product design and development as well. Furthermore, through joint sourcing and development for projects outside Japan, Hitachi and Toyo Denki Seizo aim to strengthen their competitiveness and further expand their overseas businesses.
As part of the strategic alliance announced today, Hitachi and Toyo Denki Seizo will purchase and hold each other’s equity shares as follows.
Hitachi will purchase through a private placement 2,100,000 shares of treasury stock held by Toyo Denki Seizo (representing approximately 4.5% of total issued shares). An outline of the share purchase is as follows.
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(1) Payment date |
November 11, 2010 |
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(2) No. of shares to be purchased |
2,100,000 shares of common stock |
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(3) Purchase price |
340 yen per share (Total payment 714 million yen)* |
|
(4) Purchase method |
Private placement |
Note: *The amount to be paid shall be based on the closing price of Toyo Denki Seizo’s shares on October 22, 2010, the nearest trading day to the board of directors’ resolution regarding the private placement of shares.
Toyo Denki Seizo will purchase shares of Hitachi through stock exchanges, with the aim of acquiring 2,100,000 shares (representing approximately 0.046% of total issued shares). An outline of the share purchase is as follows.
|
(1) Purchase period |
October 26, 2010 to March 31, 2011 |
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(2) No. of shares to be purchased |
2,100,000 shares of common stock |
|
(3) Purchase price |
Market price |
|
(4) Purchase method |
Purchase on stock exchanges |
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Company |
Hitachi, Ltd. |
Toyo Denki Seizo K.K. |
|
Representative |
Hiroaki Nakanishi, Representative Executive Officer and President |
Hiroshi Tsuchida, President |
|
Head office |
6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8280 |
2-9-2 Kyobashi, Chuo-ku, Tokyo 104‐0031 |
|
Establishment date |
February 1, 1920 |
June 20, 1918 |
|
Main businesses |
Development, manufacture and sales of products and provision of services across 11 segments: Information & Telecommunication Systems, Power Systems, Social Infrastructure & Industrial Systems, Electronic Systems & Equipment, Construction Machinery, High Functional Materials & Components, Automotive Systems, Components & Devices, Digital Media & Consumer Products, Financial Services, Others (Consolidated) |
Transportation Systems Industrial Systems Information Systems |
|
No. of employees |
359,746 (As of March 31, 2010) (Consolidated) |
1,073 (As of May 31, 2010) (Consolidated) |
|
Capital |
408,813 million yen (As of June 30, 2010) |
4,482 million yen (As of May 31, 2010) |
|
Revenues |
8,968,546 million yen (Year ended March 2010) (Consolidated) |
35,429 million yen (Year ended May 2010) (Consolidated) |
Hitachi, Ltd., (NYSE: HIT / TSE: 6501), headquartered in Tokyo, Japan, is a leading global electronics company with approximately 360,000 employees worldwide. Fiscal 2009 (ended March 31, 2010) consolidated revenues totaled 8,968 billion yen ($96.4 billion). Hitachi will focus more than ever on the Social Innovation Business, which includes information and telecommunication systems, power systems, environmental, industrial and transportation systems, and social and urban systems, as well as the sophisticated materials and key devices that support them. For more information on Hitachi, please visit the company's website at http://www.hitachi.com.
Toyo Denki Seizo K.K. (TSE: 6505), headquartered in Tokyo, Japan, engages in three main areas of business-transportation systems, industrial systems and information systems. In the field of transportation systems, Toyo Denki Seizo is a leading manufacturer of electrical equipment for rail vehicles. In the industrial sector, Toyo Denki Seizo mainly supplies motors, inverters and other electrical equipment used in industrial machinery. In the field of information systems, the company develops and manufactures station operating equipment and remote monitoring systems. Toyo Denki Seizo is strongly committed to addressing global warming and promoting recycling by developing and manufacturing energy-efficient products. For more information on Toyo Denki Seizo, please visit the company's website at http://www.toyodenki.co.jp.
Japan
Katsunori Shimokawara
Hitachi, Ltd.
+81-3-5208-9324
katsunori.shimokawara.zs@hitachi.com
U.S.
Mickey Takeuchi
Hitachi America, Ltd.
+1-914-333-2987
Masayuki.Takeuchi@hal.hitachi.com
Japan
Fuyuki Kitahara
Toyo Denki Seizo K.K.
+81-3-3535-0633
contact@toyodenki.co.jp
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