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Mitsubishi Heavy eyes closer steel ties with Siemens

JIJI

Mitsubishi Heavy Industries Ltd. is keen to build a closer partnership with German partner Siemens AG so it can compete better against global rivals, President Shunichi Miyanaga said in a recent interview.

Miyanaga said he hopes to explore stronger relations in a business field where the two companies can achieve “technical synergy effects,” specifically mentioning “something close to the steelmaking machinery business.” The two companies have agreed to set up a joint venture to manufacture steelmaking machinery.

Mitsubishi Heavy forecasts its group sales will exceed ¥4 trillion in the fiscal year ending in March. It aims to increase that figure to ¥5 trillion in fiscal 2017.

“Of the additional ¥1 trillion, about ¥500 billion will be generated mostly as a result of mergers and acquisitions,” Miyanaga said, suggesting that the company will explore such opportunities.

In June, Mitsubishi Heavy and Siemens launched a joint bid to acquire the energy-related operations of French conglomerate Alstom, countering a buyout offer from U.S.-based General Electric Co.

Although the Mitsubishi Heavy-Siemens alliance lost out to GE, the counterbid forced GE to revise its initial bid for all of Alstom’s energy-related operations and instead propose joint ventures with the French firm for some of its operations.

Miyanaga said the counterbid will delay GE’s plan to launch comprehensive cost-cutting measures after the acquisition by two to three years.

The president also said Mitsubishi Heavy will focus on promoting sales of a nuclear reactor jointly developed with France’s Areva SA.

“We can compete better against GE-Alstom,” he said, citing the Middle East as a prospective destination for reactor exports.