MOSCOW (MRC) -- Hitachi Ltd. is in talks with Showa Denko K.K. to sell its chemical unit Hitachi Chemical Co, said Reuters.
Hitachi is looking to offload its chemical unit so it can focus resources on what it believes to be growing sectors such as information technology and social infrastructure, the sources said.
If a deal is reached, Showa Denko is expected to launch a tender offer in mid-December to make Hitachi Chemical a wholly owned subsidiary for around ?900 billion (USD8.26 billion), the sources said.
An acquisition of that scale would be the largest yet for Showa Denko, and would boost the company’s revenue from advanced automotive batteries and functional materials, two segments that are growing fast as carmakers race to make more electric-powered vehicles.
Hitachi Chemical’s board agreed to negotiate with Showa Denko as a preferred bidder in what will probably be a tender offer that will include the rest of the company’s publicly listed shares, according to a person familiar with the matter who asked not to be identified because the information isn’t public.
As it was written earlier, in March, Hitachi sold its car navigation unit Clarion Co. to French auto parts maker Faurecia SA.
Hitachi and Honda Motor Co. said last month they will merge four auto parts suppliers under a new company to boost competitiveness.
Hitachi Chemical, established in 1962, makes a wide range of products, including materials for semiconductors and lithium-ion batteries as well as auto parts. The company logged a group net profit of ?28.7 billion on sales of ?681.0 billion in the business year through March.
Tokyo-based Showa Denko, a manufacturer of various chemical products set up in 1939, posted a group net profit of ?111.5 billion on sales of ?992.1 billion in 2018.
MRC