Information contained in this news release is current as of the date of the press announcement, but may be subject to change without prior notice.
July 23, 2024
Tokyo, July 23, 2024 – Hitachi Global Life Solutions, Inc. (“Hitachi GLS”), a subsidiary of Hitachi, Ltd. (TSE:6501, “Hitachi”) have reached an agreement with Johnson Controls International plc ( “JCI”), and Germany-based Robert Bosch GmbH (“Bosch”), regarding the transfer of shares in Johnson Controls-Hitachi Air Conditioning Holding (UK) Ltd (“JCH”), and entered into share purchase agreements. JCH is an air conditioning joint venture established with JCI.
To enhance its competitiveness in the global air conditioning industry, which is undergoing consolidation, Hitachi, and Hitachi GLS, together with JCI, identified Bosch as the best partner to enable further growth of the global air conditioning business due to its footprint in Europe and its track record in heating business, and have decided to sell all shares in JCH to Bosch. Based on this agreement, Hitachi GLS will transfer all its 40% stake in JCH to Bosch (Purchase price of USD 1.4billion / JPY 195 billion*). The new company, with its new shareholder Bosch, will also concurrently enter into a brand license agreement with Hitachi GLS to continue providing Hitachi-branded air conditioning equipment globally. In addition, Hitachi GLS will acquire JCH’s Shimizu Factory, a development and manufacturing base for commercial air conditioning equipment. This will enable Hitachi GLS to operate the entire process in Japan, from development and manufacturing to sales and maintenance services, while developing highly competitive products that meet the needs of the market.
The transaction is expected to be close before the end of the first quarter of fiscal year ending March 31, 2026 subject to regulatory approvals and other customary closing conditions. If this transaction is closed during the fiscal year ending March 31, 2026, Hitachi expects to post a gain on business reorganization of approximately 125.0 billion yen as other income in its consolidated financial statements for the fiscal year ending March 31, 2026.
Hitachi will strive to further enhance its corporate value by improving capital efficiency through leveraging the funds obtained from this share transfer for investment in growth opportunities and shareholder returns.
* 140 yen to the U.S. dollar
* All of JCI’s 60% stake in JCH will be transferred to Bosch, and Bosch will own 100% of JCH shares.
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Hitachi drives Social Innovation Business, creating a sustainable society through the use of data and technology. We solve customers’ and society’s challenges with Lumada solutions leveraging IT, OT (Operational Technology) and products. Hitachi operates under the 3 business sectors of “Digital Systems & Services” – supporting our customers’ digital transformation; “Green Energy & Mobility” – contributing to a decarbonized society through energy and railway systems, and “Connective Industries” – connecting products through digital technology to provide solutions in various industries. Driven by Digital, Green, and Innovation, we aim for growth through co- creation with our customers. The company’s revenues as 3 sectors for fiscal year 2023 (ended March 31, 2024) totaled 8,564.3 billion yen, with 573 consolidated subsidiaries and approximately 270,000 employees worldwide. For more information on Hitachi, please visit the company’s website at https://www.hitachi.com.
With home appliances and air conditioning businesses as its core products, Hitachi GLS engages in the sales of home appliances, air conditioning equipment, and facility equipment, as well as the provision of engineering and maintenance services, and focuses on offering product solutions that utilize digital technology.
Toward the realization of a better society, Hitachi GLS creates life solutions that contribute to improving the quality of life (QoL) of consumers, focusing on the four areas of "enrichment of daily life," "advancement and enhancement of medical care," "recycle-based society," and "low environmental impact," with the business slogan, “Happiness 360° - Joyous life for each and all,” through innovation leveraging the business foundation the company has developed to date, the combined strengths of the Hitachi Group, and digital technology. Hitachi GLS will also accelerate the overseas sales of Hitachi brand products and the overseas expansion of the life solution business by strengthening global alliances. For more information, please visit the company’s website at https://corp.hitachi-gls.co.jp/.
Media Contact:
Chhavi Sharma
Corporate Communications Group
Hitachi India Pvt. Ltd.
+91 92051 51534
chhavi.sharma@hitachi.co.in
Cautionary Statement
Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify “forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this report.
Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:
• economic conditions, including consumer spending and plant and equipment investment in Hitachi’s major markets, as well as levels of demand in the major industrial sectors Hitachi serves;
• exchange rate fluctuations of the yen against other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated;
• uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing;
• uncertainty as to general market price levels for equity securities, declines in which may require Hitachi to write down equity securities that it holds;
• fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum, synthetic resins, rare metals and rare-earth minerals, or shortages of materials, parts and components;
• credit conditions of Hitachi’s customers and suppliers;
• general socioeconomic and political conditions and the regulatory and trade environment of countries where Hitachi conducts business, particularly Japan, Asia, the United States and Europe, including, without limitation, direct or indirect restrictions by other nations on imports and differences in commercial and business customs including, without limitation, contract terms and conditions and labor relations;
• uncertainty as to Hitachi’s ability to response to tightening of regulations to prevent climate change;
• uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s ability to protect its confidential information or that of its customers;
• uncertainty as to Hitachi’s ability to attract and retain skilled personnel;
• uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technologies on a timely and cost-effective basis and to achieve market acceptance for such products;
• the possibility of disruption of Hitachi’s operations by natural disasters such as earthquakes and tsunamis, the spread of infectious diseases, and geopolitical and social instability such as terrorism and conflict;
• estimates, fluctuations in cost and cancellation of long-term projects for which Hitachi uses the percentage-of- completion method to recognize revenue from sales;
• increased commoditization of and intensifying price competition for products;
• fluctuations in demand of products, etc. and industry capacity;
• uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in demand of products, etc., exchange rates and/or price of raw materials or shortages of materials, parts and components;
• uncertainty as to the success of cost structure overhaul;
• uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business;
• uncertainty as to the success of acquisitions of other companies, joint ventures and strategic alliances and the possibility of incurring related expenses;
• uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness;
• the potential for significant losses on Hitachi’s investments in equity-method associates and joint ventures;
• uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity-method associates and joint ventures have become or may become parties;
• the possibility of incurring expenses resulting from any defects in products or services of Hitachi;
• uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property; and
• uncertainty as to the accuracy of key assumptions Hitachi uses to evaluate its employee benefit-related costs.
The factors listed above are not all-inclusive and are in addition to other factors contained elsewhere in this report and in other materials published by Hitachi.
* This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
