Hitachi Credit Corp. and Hitachi Leasing Ltd. said Tuesday they have agreed to merge Oct. 1 to create a new financial service company.
The new company, whose name has yet to be decided, will be the biggest firm in Japan’s leasing industry in terms of the value of leasing contracts, said the financial units of Hitachi Ltd.
The company is expected to chalk up a pretax profit of 30.01 billion yen and net profit of 16.94 billion yen on sales of 832.61 billion yen on an unconsolidated basis in fiscal 2001.
Hitachi Credit is a consumer finance and leasing company owned 51.76 percent by Hitachi, one of Japan’s major electric appliance manufacturers. It is listed on the Tokyo Stock Exchange’s First Section.
Hitachi Leasing mainly leases machinery and is not listed on any stock exchange. It is owned 30.29 percent by Hitachi.
In fiscal 1998, Hitachi Credit posted an unconsolidated pretax profit of 18.02 billion yen and a net profit of 8.70 billion yen on sales of 408.12 billion yen, compared with Hitachi Leasing’s corresponding figures of 3.65 billion yen, 1.22 billion yen and 355.19 billion yen.
Under the agreed merger, Hitachi Credit will be the surviving entity, with Hitachi Leasing shareholders receiving 13.28 Hitachi Credit shares for each Hitachi Leasing share.
Masayoshi Hanabusa, president of Hitachi Credit, will become president of the new company, which will accept workers from the two companies without implementing a workforce cut.
The merger is in line with Hitachi’s restructuring plan to strengthen consolidated operations.
The plan regards financial services as a core business for the Hitachi group.