Hitachi to make 5 listed units wholly owned

Hitachi will spend up to ¥300 billion (Dh11.75bn) to make five listed units wholly owned, the Nikkei newspaper said yesterday, sending shares in the Japanese electronics conglomerate up more than five per cent. Hitachi will launch tender offers next month to buy the shares it does not own in Hitachi Maxell, Hitachi Plant Technologies, Hitachi Information Systems, Hitachi Software Engineering and Hitachi Systems & Services, said Nikkei. Hitachi, a sprawling conglomerate with more than 900 group firms and 16 listed subsidiaries, is looking to revamp its strategy for managing its assets after losing about $8bn (Dh29.38bn) in the past business year, a record for a Japanese manufacturer. The company aims to take full control of those companies with strong growth prospects, and hopes the move will boost profitability by consolidating marketing and technological development of the group, said Nikkei. "Hitachi is doing something that it couldn't do before – change its business structure. It's a first step," said Deutsche Bank analyst Takeo Miyamoto. "But this will not raise Hitachi's net profit that much, nor does it change the fact that it still needs to raise funds and shore up its capital." Hitachi will announce the move this week, said Nikkei. A Hitachi spokesman said nothing has been decided or announced by the company. He declined to comment on whether it was considering making the five firms wholly owned units. Shares of Hitachi were up 5.4 per cent at ¥310 as of 0128 GMT, outperforming a 1.8 per cent rise in the benchmark Nikkei average. Shares in Hitachi Maxell and other reported targets were untraded due to a glut of buy orders. Hitachi Maxell makes magnetic tapes and lithium-ion batteries, Hitachi Plant Technologies is a plant engineering firm, Hitachi Information Systems is a data-processing company, Hitachi Software Engineering is a software developer, and Hitachi Systems & Services is a computer systems integrator. Hitachi currently has stakes ranging from 51.2 per cent to 68.1 per cent in the five companies. Buying all outstanding shares in the companies would cost about Y200bn. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .