Toshiba, Mitsubishi Electric Integrating
Posted on: Friday, 18 April 2003, 06:00 CDT
By KOZO MIZOGUCHI
TOKYO (AP) -- Toshiba Corp. and Mitsubishi Electric Corp. are integrating their businesses in industrial electric and automation systems in an effort to be more competitive globally.
Under the deal announced Friday, the two Japanese companies will set up an equally owned joint venture, capitalized at 35 billion yen ($291.6 million) and tentatively based in Tokyo.
The venture will initially employ 2,300 people, start operations Oct. 1 and expects annual sales to reach 160 billion yen ($1.33 billion) by fiscal 2006.
The partnership is the latest in a series of emerging alliances among Japan's electronics companies, amid increasing competition in the industrial sector and capital cutbacks by manufacturers.
The new joint venture, whose name is still undecided, is designed to "promote overall competitiveness and a global presence," both sides said in a statement.
Toshiba also said it will buy out its partner in Toshiba GE Automation Systems Corp., a Japan-based joint venture owned by Toshiba and General Electric Co. (GE) of the United States.
It did not say how much Toshiba will pay for the GE stake in the venture, which is engaged in sales and engineering of industrial drive and automation systems.
The 2 billion yen ($16.6 million) joint venture, set up in October 2000, will be integrated into the joint venture with Mitsubishi when the transfer of ownership is completed, which is expected by June, Toshiba said.
Toshiba GE Automation Systems, owned 51 percent by Toshiba and 49 percent by GE, employs 240 workers.
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