Hitachi, Mitsubishi sign agreements for hydropower business merger

Hitachi Ltd., Mitsubishi Electric Corporation and Mitsubishi Heavy Industries Ltd. have entered into a basic agreement calling for the three companies to consolidate their hydroelectric power generation system operations by way of simplified absorption-type company splits of their respective operations and the transfer of those operations to Hitachi subsidiary HM Hydro Ltd.

The Japanese companies first announced plans to merge hydroelectric operations in July last year.

A part of the agreements, shares in HM Hydro have been allocated as follows: 44.7 percent to Hitachi, 33.2 percent to Mitsubishi Electric, with the remaining 22.1 percent to MHI, a press release states.

Under the deal, the companies will transfer all marketing, installation and after-sale services pertaining to the water turbines, generators, and auxiliary controllers and other equipment and devices that comprise hydroelectric power generation facilities and equipment. They will also transfer systems engineering and development and design of core components.

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Hitachi, Mitsubishi discuss consolidation of hydropower businesses

Hitachi, Mitsubishi Electric and Mitsubishi Heavy Industries have reached a basic agreement calling for the three companies to initiate concrete discussions toward consolidation of their hydroelectric power generation system operations.

In a statement, the three companies said they would look to jointly establish an operational company and build a coherent business structure by integrating their various activities pertaining to hydroelectric power generation systems, including marketing, servicing, engineering, development and design.

In the coming years, hydroelectric power generation is expected to attract continuous demand as a clean renewable energy contributing toward the realization of a low-carbon society, the statement read. The Japanese companies will have a particular focus on strengthening their competitiveness in pumped-storage power generation, particularly in a field where high speeds, large capacities and high heads are required.

Outline of new company (as currently planned):
1. Operation commencement: Oct. 1, 2011
2. Shareholders: 50 percent: Hitachi, Ltd; 50 percent: Mitsubishi companies (Mitsubishi Electric Corporation and Mitsubishi Heavy Industries, Ltd), with each company’s shareholding ratio to be decided later
3. Scope of business:
a. Marketing, installation and after-sale servicing of hydroelectric power generation systems for electric utilities both in Japan and overseas
b. Engineering relating to hydroelectric power generation systems
c. Development and design of main components for hydroelectric power generation systems, including water turbines, water turbine generators and control systems

The company name, representative, head office location, capitalization, etc. will be decided at a later date, the statement said.

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