Hitachi units plan ’13 merger

Kyodo

Hitachi Metals Ltd. and Hitachi Cable Ltd. announced Tuesday they will merge in April to boost their competitiveness against foreign rivals.

The merger by the two subsidiaries of Hitachi Ltd., both listed on the first section of the Tokyo Stock Exchange, will create a highly functional material maker with about ¥1 trillion in annual revenue, based on their annual sales reported for the year that ended March 31.

The companies said they aim to finalize details such as the merger ratio and ink the deal in January and then merge April 1. Hitachi Cable will be absorbed by Hitachi Metals and will be delisted in late March.

Hitachi Metals has expertise in development of neodymium magnets essential for motors in electric vehicles and industrial machinery, while Hitachi Cable produces electric and optical cables, for which demand from emerging economies is rising. The companies lag behind in overseas operations.

As domestic demand for social infrastructure businesses has peaked, Hitachi is looking to expand its overseas operations in the field.

Hitachi has traditionally allowed its group firms relative independence but is now promoting restructuring among them in an effort to compete against international giants such as General Electric Co. and Siemens A.G.

Hitachi has a 52.8 percent stake in Hitachi Metals and owns 51.4 percent of Hitachi Cable.