Hitachi Ltd. said Wednesday it will sell its 51.7 percent stake in chip manufacturing device maker Hitachi Kokusai Electric Inc. to U.S. investment fund Kohlberg Kravis Roberts to streamline operations and focus on core businesses.
KKR plans to acquire all shares in Hitachi Kokusai through a series of transactions, including a public tender offer, in a deal worth over ¥200 billion, Hitachi said in a statement.
Hitachi and Hitachi Kokusai began looking for a buyer last September, and earlier this month short-listed KKR and Japan Industrial Partners, a Japanese private equity fund.
Hitachi has been selling off various operations to focus on infrastructure and "internet of things" related businesses. It previously sold electric power tool maker Hitachi Koki Co. to KKR, and portions of its stakes in Hitachi Transport System Ltd. and leasing unit Hitachi Capital Co. to other buyers.
A unit of KKR plans to conduct a tender offer for Hitachi Kokusai shares in early August, offering ¥2,503 per share.
Hitachi will not sell its 51.7 percent stake to KKR through the tender offer, but will later when Hitachi Kokusai conducts a share buyback as part of KKR's takeover plan.
The KKR subsidiary, HKE Holdings, will take control of the chip device operation of Hitachi Kokusai, which will be left with industrial video and communication systems businesses.
Hitachi and Japan Industrial Partners will then each buy 20 percent stakes in the delisted Hitachi Kokusai, the statement said.