Machinery giant Hitachi Ltd. said Wednesday that it will sell its subsidiary Hitachi Chemical Co. to Showa Denko K.K. and its diagnosis imaging equipment business to Fujifilm Holdings Corp. for a total of about ¥700 billion.

Hitachi aims to speed up the reorganization of its group businesses in the three years to fiscal 2021. Proceeds from the sales will be invested into research and development related to the “internet of things” along with Hitachi’s pillars of growth and business acquisitions.

Hitachi Executive Vice President Toshikazu Nishino told a news conference that the company “will place greater focus on digital businesses by further accelerating selection and concentration.”

Showa Denko, a major chemical-maker, will launch a tender offer in mid-February next year to buy shares in Hitachi Chemical, listed on the first section of the Tokyo Stock Exchange, for ¥4,630 apiece. Hitachi plans to sell its entire 51 percent stake in Hitachi Chemical in the tender offer.

Showa Denko plans to acquire the rest of Hitachi Chemical shares as well from other shareholders to make it a fully owned subsidiary.

Showa Denko is expected to spend about ¥960 billion on the acquisition. “We need to expand the scale of our business to a certain level to be able to compete in the global market,” said Showa Denko President Kohei Morikawa at a news conference.

Fujifilm plans to acquire all shares in Hitachi’s diagnosis imaging equipment business, which will be spun off into a new firm around July 2020, for about ¥179 billion.

Fujifilm, which has a strong market position for equipment used to analyze medical data in hospitals, hopes to boost its medical information technology business through the acquisition of the Hitachi division, which includes computer tomography and magnetic resonance imaging technologies.

By the mid-2020s, Fujifilm aims to double annual sales from its health care business from current levels to ¥1 trillion on a consolidated basis.

“The acquisition is an important step for further growth of our health care business,” Fujifilm Chairman Shigetaka Komori said.

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