Hitachi plans to sell materials unit in over $6b deal

Photo: REUTERS/Toru Hanai

Hitachi Ltd plans to launch a sale of its materials unit as early as next month in a deal that could be worth more than 700 billion yen ($6.6 billion), three people with knowledge of the matter said. 

Hitachi is planning to sell its 53% stake in Hitachi Metals Ltd, which makes components for cars and industrial equipment, said the sources who declined to be named as they were not authorised to speak to the media.

Other minority shareholders in the Hitachi unit are expected to sell their stakes to a winning bidder, the sources said, adding that Hitachi Metals would eventually be delisted from the Tokyo bourse. Hitachi Metals had a market value of about 700 billion yen ($6.63 billion) based on Tuesday’s close. A buyout would exceed that amount given a premium would be expected.

Hitachi has retained Goldman Sachs Group to advise on the sale while Hitachi Metals has hired Bank of America, the people said. Spokespeople for the two banks declined to comment.

Hitachi and Hitachi Metals declined to comment. The conglomerate said in August it was considering various options for the metals unit.

Japanese conglomerates are driving the country’s M&A rebound as they reorganise. Deals taking businesses private have amounted to $41.8 billion this year, up 34% year on year, according to Dealogic.

On Tuesday state-backed Nippon Telegraph and Telephone Corp (NTT) announced it planned to take its wireless carrier business NTT Docomo Inc private in a deal worth 4.25 trillion yen.

The sale of Hitachi Metals is the latest of Hitachi‘s divestiture of businesses.

Hitachi sold chemical unit Hitachi Chemical Co to Showa Denko and diagnostic imaging business to Fujifilm Holdings Corp in December last year.

Previously, Hitachi sold semiconductor equipment maker Hitachi Kokusai Electric and power tool unit Hitachi Koki, both to KKR. It also sold car navigation maker Clarion Co to France’s Faurecia SA.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.