News - Fiscal 2015
Subsidiaries of Sumitomo Heavy Industries, Ltd. and Mitsubishi Heavy Industries, Ltd. Conclude Absorption-Type Company Split Agreement for Industrial Crane

May 08, 2015

Sumitomo Heavy Industries, Ltd.
Sumitomo Heavy Industries Material Handling Systems Co., Ltd.
Mitsubishi Heavy Industries, Ltd.
Mitsubishi Heavy Industries Machinery Technology Corporation

Sumitomo Heavy Industries Material Handling Systems Co., Ltd. (President: Katsuhide Yokota; hereinafter, "SHI Material Handling Systems"), a consolidated subsidiary of Sumitomo Heavy Industries, Ltd. (President and CEO: Shunsuke Betsukawa; hereinafter, “SHI”), and Mitsubishi Heavy Industries Machinery Technology Corporation (President: Mamoru Hasegawa; hereinafter, "MHI Machinery Technology"), a consolidated subsidiary of Mitsubishi Heavy Industries, Ltd. (President and CEO: Shunichi Miyanaga; hereinafter, "MHI"), have concluded an absorption-type company split agreement regarding the transferal of industrial crane (hereinafter, "crane") business, as described below.

1. Background and objectives

The crane business in Japan, despite being subject to highly variable market conditions in the short term depending on the type of equipment, has been affected by a long-term contraction in the harbor, shipbuilding, iron and steel, and electric power industries domestically. This situation requires that the business meet the demands of a mature market. On the other hand, while tending towards growth in some areas, particularly in Asia, the crane business overseas continues to face severe competition with overseas companies, underscoring the important need to be selective and show differentiation in these markets.
Given this situation, SHI Material Handling Systems and MHI Machinery Technology have decided to pool their resources to increase their competitiveness in crane equipment, their area of expertise.
With this absorption-type company split, the two companies will enhance their lineup of equipment types and services, while at the same time merging their technical skills and know-how. Together with a more efficient allocation of managerial resources, these measures will allow the two companies to strengthen their ability to meet the demands of the Japanese market. In addition, by investing in efforts overseas and in new products and businesses, all of which are essential to future growth, the two companies aim to maintain competitiveness in the crane business.

2. Overview of this absorption-type company split

1) Description of business included in this absorption-type company split
 Crane business of MHI Machinery Technology
 (ladle cranes, ceiling-mounted cranes, container cranes, gantry cranes, etc.)
2) Method for the absorption-type company split
 MHI Machinery Technology will be split off, with its business being transferred to SHI Material Handling
 Systems. MHI is expected to acquire a stake in SHI Material Handling Systems of approximately 17%, under
 a policy of maintaining its involvement in the crane business as a shareholder.

3. Overview of SHI Material Handling Systems

1) Company name
 Sumitomo Heavy Industries Material Handling Systems Co., Ltd.
2) Head office location
 1-1 Osaki 2-chome, Shinagawa-ku, Tokyo, Japan
3) Representative
 Katsuhide Yokota, President
4) Business description
Manufacture and sales of machinery for materials handling, logistics machinery, parking equipment,
 examination equipment, construction machinery, and other machinery for industrial and general applications
 and after-sales service
5) Capital
 JPY 480 million
6) Date established
 April 1, 1978
7) Major shareholder and shareholding
 Wholly owned by Sumitomo Heavy Industries, Ltd.

4. Overview of MHI Machinery Technology

1) Company name
 Mitsubishi Heavy Industries Machinery Technology Corporation
2) Head office location
 6-22, Kan-on-shin-machi 4-chome, Nishi-ku, Hiroshima, Japan
3) Representative
 Mamoru Hasegawa, President
4) Business description
 Design, manufacturing, marketing, and after-sales services for the following machinery: material handling
 systems and related machinery and equipment, as well as control systems; rubber and tire machinery and
 related machinery and equipment; chemical machinery; and industrial machinery
5) Capital
 JPY 1,000 million
6) Date established
 April 1, 2012
 (MEC Engineering Service Co., Ltd., a precursor of MHI Machinery Technology, was established on October
 1, 1984)
7) Major shareholder and shareholding
 Wholly owned by Mitsubishi Heavy Industries, Ltd.

5. Schedule for this absorption-type company split

 May 8, 2015: Conclusion of the absorption-type company split agreement
 October 1, 2015: Planned date for the split (date on which the agreement takes effect)