Hitachi : to sell overseas home appliance business to Turkey's Arcelik
December 13, 2020 at 10:49 am IST
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Hitachi Ltd. is in the final stages of talks to sell a 60 percent stake in its overseas home appliance business to Arcelik A.S. of Turkey for around $300 million, a person familiar with the matter said Saturday.
The Japanese conglomerate plans to sell the stake in the business run by its home appliance unit Hitachi Global Life Solutions Inc., as it seeks to establish sales channels in Europe and other markets abroad through the Turkish company's networks, the person said.
Hitachi is in the midst of a restructuring drive to return its focus to its core operations such as infrastructure and information technology.
As part of such efforts, the company is considering selling all or part of its stake in its Hitachi Construction Machinery Co. and Hitachi Metals Ltd. subsidiaries, according to sources close to the matter.
Its home appliance business posted sales of 465.3 billion yen ($4.5 billion) in the year ended March 2020, mostly derived from the domestic market. China and other Asian nations remain the business's main overseas markets.
Hitachi specializes in manufacturing and marketing of electronic and industrial equipments. Net sales (including intragroup) break down by family of products and services as follows:
- social infrastructure and industrial systems (24.7%): elevators, escalators, industrial facilities, railway systems, power generation units, etc. The group also provides engineering and construction of nuclear, hydroelectric, and thermal power plants services;
- information and telecommunications products and services (20.1%): systems integration, cloud computing, software, servers, hard disks, PCs, ATMs, data communication base stations, payment terminals, etc.;
- materials and components (16.6%): semi-conductor materials, printed circuit cards, cables, copper and forged steel products, magnetic materials, organic and inorganic chemical products, etc.;
- construction equipment (10%) : hydraulic excavators, wheel loaders, mining equipment, etc.;
- automotive systems (9.4%): powertrain systems, control systems, etc.;
- electronic products (9.2%): fiber-optic components, screen tubes, testing and measurement equipment, medical equipment, equipment for manufacturing semiconductors, etc.;
- household appliances (4.7%): heating and air conditioning equipments, refrigerators, washing machines, etc.;
- other (5.3%): mainly transport, financial and logistical services.
Net sales are distributed geographically as follows: Japan (49.2%), Asia (21.3%), North America (12.7%), Europe (10.8%) and other (6%).