Mitsubishi Electric, Mitsubishi Heavy Industries Consolidate Power-Generator Businesses

The power-generator systems businesses of Mitsubishi Electric Corporation and Mitsubishi Heavy Industries, Ltd. have confirmed their plan to unite under a joint venture. This definitive agreement follows their initial principal agreement from Dec. 26.

This merger will bring together their respective power-generator systems businesses into a new joint venture entity, expected to be effective from April 1, 2024. Detailed agreements outlining the conditions of this integration have been solidified by both parties.

In response to the rising global concerns over climate change, the joint venture seeks to advance its power-generator systems business while bolstering efforts toward achieving carbon neutrality. The integration is intended to enhance their competitive edge amid shifts in the energy market, such as increasing electricity demand and an emphasis on energy security.

The merger will be implemented through an absorption-type company split, with a preparatory company established by Mitsubishi Electric acting as the succeeding entity. Both parent companies will then transfer their businesses to this entity. Equity adjustments will be made to allow Mitsubishi Electric to hold 51% and Mitsubishi Heavy Industries 49% of the shares in the joint venture upon the effective date.