Hitachi Limited and Hitachi Mobile Company Limited have announced that they signed a stock-for-stock exchange agreement today to make Hitachi Mobile a wholly-owned subsidiary of Hitachi. This move is intended to strengthen Hitachi's automotive systems business.
Hitachi currently owns 64.8% shares of Hitachi Mobile. However, subject to an approval of Hitachi Mobile's extraordinary general meeting of shareholders to be held on 17th February, 2006, Hitachi Mobile will become a wholly-owned subsidiary of Hitachi through a stock-for-stock exchange on 1st April, 2006. Hitachi Mobile's shares will be de-listed as a result of the stock-for-stock exchange.
Hitachi Mobile boasts a nationwide sales and service network in Japan and engineering service capabilities in the maintenance and aftermarket fields for automotive equipment, including electrical components. It has played a vital role in Hitachi's automotive systems business. However, competition in this market sector is rapidly intensifying. Consequently, there is an increasing need to handle a broader array of products in line with Hitachi's automotive systems business strategy as well as to work more closely with Hitachi units involved in the development and manufacture of replacement parts, including rebuilt components.
To meet this need, the Hitachi Group must conduct its operations even more efficiently with the aim of responding faster to needs involving customers and technologies. The decision to make Hitachi Mobile a wholly-owned subsidiary reflects Hitachi's belief that the integration of the two companies' operations is essential to accomplishing this goal.
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