Business

Tuesday July 28, 2009

Hitachi plans consolidation exercise


TOKYO: Hitachi Ltd plans to absorb five listed units, two sources close to the matter said yesterday, as the loss-making conglomerate tries to pool its sprawling resources to turn a profit.

The news and hope that this would prelude further consolidation lifted shares of the Japanese maker of industrial electronics along with its subsidiaries.

Hitachi will launch tender offers as early as next month to buy the shares it doesn’t already own in Hitachi Maxell, Hitachi Plant Technologies Ltd, Hitachi Information Systems Ltd, Hitachi Software Engineering Co and Hitachi Systems & Services Ltd, the sources said.

“(Hitachi) can’t do everything and expect to do everything well,” said one source, who declined to be named because the move has not been announced. “(It’s) spread too thin and needs to consolidate more.”

The move could cost Hitachi up to 300 billion yen (US$3.2bil), including a premium on the units’ share price, the Nikkei business daily said.

Hitachi, a sprawling conglomerate with more than 900 group firms and 16 listed subsidiaries, is looking to revamp the management of its assets after losing about US$8bil in the past business year, a record for a Japanese manufacturer. — Reuters


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