Japanese industrial conglomerate Hitachi Ltd. Will sell about half of its construction machinery subsidiary to groups such as Itochu Corp. For 182.5 billion yen ($1.6 billion).
Tokyo-based Hitachi Ltd. (Hitachi) said in a statement Friday that it will sell a 26.1% stake in Hitachi Construction Machinery (Hitachi Construction Machinery Co.) for 3300 yen ($30) a share. This is a premium over its closing price of 2976 yen.
After the sale, Hitachi will retain a 25.4% stake, which will also be bought by Japan Industrial Partnership (Japan Industrial Partners Inc.).
Join the digital sector and step up business restructuring
For Hitachi, the sale is the latest in a decade-long portfolio reform that aims to shift its focus to higher-margin digital businesses. In December, it was reported that the company was working with financial advisers to seek a transfer of its 40 per cent stake in Hitachi Transportation Systems Co., Ltd. (Hitachi Transport System Ltd.).
The industrial conglomerate has signed a series of multibillion-dollar agreements, including a $9.6 billion acquisition of American software development company GlobalLogic Inc. The $3.5 billion sale of its stake in Hitachi Metals Ltd. (Hitachi Metals Ltd.) to a Bain Capital-led consortium announced in April has been delayed by regulators.
Founded in 1970, Hitachi Construction Machinery is a major global equipment manufacturer that manufactures and sells excavators, loaders and dump trucks for the construction and mining industries. In the last fiscal year, the company had sales of 813.3 billion yen ($7.2 billion) and employs about 25000 people worldwide, according to the company's website.