IHI Metaltech and Mitsubishi-Hitachi Metals Machinery Reach Basic Agreement On Integration of Rolling Mill Businesses
Tokyo, June 13, 2013 – IHI Corporation (IHI), IHI Metaltech Co., Ltd. (IHIMT, a wholly owned subsidiary of IHI) and Mitsubishi-Hitachi Metals Machinery, Inc. (MH) have reached a basic agreement on the integration of their businesses centering on rolling mills.
The integration target is set for October 1, 2013, with MH to take over the rolling mill and related business operations of IHIMT. IHI, through partial capital participation in MH, is to remain involved in rolling mill operations from the position of a shareholder. The rate of capital participation is scheduled to be approximately 10%.
Going forward MH and IHI will enter into more detailed discussions concerning the integration initiative, and will cooperate in undertaking all procedures and other tasks necessary to realize the integration.
Since the financial debacle triggered by the bankruptcy of Lehman Brothers in 2008, Japan’s producers of iron and steel making machinery and equipment have faced a severe operating environment aggravated by entrenched downscaling of the global metals machinery market, an ongoing trend toward curbing capital investments, and harsh market prices. To survive global competition in this area, which is poised to become all the more intense in the years ahead, MH and IHI both concluded that it is necessary for them to boost their competitive strength through integration of their businesses.
MH was established by Mitsubishi Heavy Industries, Ltd. (MHI) and Hitachi, Ltd. in October 2000 as a domestic manufacturer of metals machinery and equipment, setting a precedent in business integration in this field. Now with the further participation of IHIMT, the integration of business operations will evolve further.
MH and IHIMT share a common business philosophy: a commitment to respond precisely and swiftly to the needs of customers in the steel and non-ferrous industries worldwide and to provide production equipment that consistently delivers world-class performance and reliability. Going forward the two companies look to enhance their comprehensive capabilities in plant engineering in steelmaking and non-ferrous rolling mills, to further build up an efficient and stable operating base as the reborn MH, and to pursue further synergy merits from their business integration and acceleration of global business expansion, in a quest to become a leading presence within the global market.