Major machine-tool maker Mori Seiki Co. said Wednesday it has signed an agreement in which a subsidiary will take over the assets and accept the engineers of failed machine-tool maker Hitachi Seiki Co.
The accord calls for the wholly owned subsidiary Mori Seiki Kosan Co. to take in 450 workers of the combined 830-strong workforce of Hitachi Seiki and an affiliated maintenance firm.
The deal will bolster the size of Mori Seiki’s development team from 250 to 400 people, all of them having the ability to design new products using a computer-aided design method.
The subsidiary will alter its corporate name to Mori Seiki Hitech Co. in line with the acquisition.
The deal will give Mori Seiki skilled personnel capable of writing application software to control sophisticated machine tools as well as trained salespeople.
Under the deal, Mori Seiki will pay 2.6 billion yen for the assets of Hitachi Seiki as well as its operations.
Although Hitachi Seiki left behind 50.4 billion yen in group debts, Mori Seiki will not assume the obligation to repay the sum, it said.
On Aug. 19, Hitachi Seiki, buffeted by debts and falling profits, asked a court to protect it from its creditors under the fast-track Civil Rehabilitation Law.
The firm, based in Abiko, Chiba Prefecture, had suffered due to shrinking orders from domestic makers. It also took blows from the higher yen and stagnant U.S. sales.
Listed on the first section of the Tokyo Stock Exchange, Hitachi Seiki posted a parent-only net loss of 4.04 billion yen in the business year to March 31.
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