Mitsubishi Electric Corporation and Mitsubishi Heavy Industries, Ltd. have officially announced a definitive agreement to integrate their power-generator systems businesses through a joint venture.

Following a preliminary agreement reached on December 26, 2022, the two companies plan to transfer their respective power-generator system businesses to the proposed joint-venture company, with both Mitsubishi Electric and Mitsubishi Heavy Industries as shareholders, effective April 1, 2024.

The integration aims to capitalize on global efforts to achieve carbon neutrality and meet the rising demand for electricity, particularly in emerging markets. As concerns about energy security and the transition to carbon-free fuels such as hydrogen and ammonia increase, large power plants are expected to play a crucial role in balancing renewable energy variability. By combining their businesses, technologies, and assets, Mitsubishi Electric and Mitsubishi Heavy Industries intend to enhance market competitiveness, strengthen their partnership, and expand their power-generator systems business on a global scale, contributing to a carbon-neutral future.

The integration details, including the schedule, method, equity contribution, and transfer of rights and obligations, will be specified in the absorption-type company-split agreement to be finalized by the end of December 2023. The joint-venture company's share distribution is expected to allocate 51% to Mitsubishi Electric and 49% to Mitsubishi Heavy Industries.

As the joint venture moves forward, Mitsubishi Electric and Mitsubishi Heavy Industries will provide updates on the impact of the integration on their business results and future prospects.

Source: Mitsubishi Electric