Hitachi, Fuji Electric and Meiden Begin Discussions toward Dissolving a T & D Joint Venture
-- Joint venture to be dissolved for a better organization, allowing each company to rebuild the T & D business to rapidly meet the dynamic change of market landscape --
Tokyo, July 29, 2011 --- Hitachi, Ltd. (“Hitachi”, NYSE:HIT / TSE:6501), Fuji Electric Co., Ltd. (“Fuji Electric”, TSE:6504) and Meidensha Corporation (“Meiden”, TSE:6508) today announced that they have agreed to discuss to dissolve Japan AE Power Systems Corporation (“AEP”), their joint venture in the power transmission and distribution (“T & D”) field for seeking a better organization for the parties, by the end of March 2012.
Based on this basic framework agreement, the three companies will proceed with discussions concerning the successor and succession method regarding the business of AEP.
AEP was established on July 1, 2001 from the consolidation of the three companies’ T & D businesses and has been developing business globally. In recent years, the market for these T & D systems has seen growing demand, particularly from emerging markets. Going forward, a high growth rate is expected by the progress of the smart energy in social infrastructure and the industrial field, such as the use of the renewable energy resources and the smart grid.
Under such circumstance, the parties had the discussions on the AEP growth strategy taking into accounts of the various factors and they came to reach a same conclusion that there is a need to fundamentally review its growth strategy. The parties recently reached a basic framework agreement that the parties will dissolve AEP for a better organization and they will rebuild and explore the growth of T & D business in each company level.
It was agreed that the top priority is current AEP bases and employees, etc. will be taken over by the three parties. AEP will continue as before to produce and deliver ordered products as well as provide maintenance for products already delivered until the joint venture is dissolved. After dissolution, the three companies, which will take over the defined AEP business, will continue to provide these services.