Press Information

MHI to Transfer Entire Retaining Shares of Caterpillar Japan,
Dissolve JV and Focus Management Resources in Core Competency Business

No.1506
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Tokyo, March 1, 2012 - Mitsubishi Heavy Industries, Ltd. (MHI), Caterpillar Inc. (Caterpillar) of Illinois, U.S.A., and Caterpillar Japan Ltd. (CJL) have agreed to transfer MHI's entire equity share in CJL (33% of outstanding shares) to CJL in the first quarter of the next fiscal year (April 1, 2012 to March 31, 2013). The estimated value of the share redemption is 36.5 billion Japanese yen. As a result the joint venture between MHI and Caterpillar, dating back to 1963, will be dissolved and CJL will become a wholly owned subsidiary of Caterpillar.

The impending transfer of shares is the second phase of a two-part share redemption plan, following an initial transfer in 2008. MHI and Caterpillar established a 50-50 joint venture in Japan more than 45 years ago. In 2008, MHI, Caterpillar and the JV – originally named Shin Caterpillar Mitsubishi Ltd. (SCM), later changed to CJL – agreed to change the shareholding ratios in CJL. Thereafter, Caterpillar and MHI came to own 67% and 33% of SCM's outstanding shares, respectively. The agreement in 2008 also included an option enabling further redemption after a certain period.

MHI is currently promoting selection of focused business areas and concentrating its business resources into those areas. Caterpillar meanwhile is seeking to further accelerate its global business expansion, focusing on rapidly emerging markets. The respective aims of the two companies thus meshed in concluding the latest agreement. Going forward MHI intends to further enhance its value by strategically focusing its management resources into its core competency businesses having high growth potential.

MHI and Caterpillar have been in a close collaborative relationship in the manufacture and marketing of Mitsubishi and Caterpillar brand forklift trucks, and they will maintain that relationship even after the second redemption.

The two companies' JV in construction machinery began in November 1963 with establishment of the equally owned Caterpillar Mitsubishi Ltd. With technological assistance from Caterpillar, the JV launched production and domestic marketing of track-type tractors and wheel loaders. In 1987, MHI's hydraulic excavator business was transferred to the JV and it was renamed Shin Caterpillar Mitsubishi Ltd. In 2001, SCM further took the transfer of most of MHI's construction machinery business, including small-size construction machinery, crawler carriers and articulated dump trucks, and expanded business as a full-line manufacturer. After the change in its shareholding ratios, the JV was renamed Caterpillar Japan Ltd., and it has become an important strategic base for Caterpillar in the Asian region.

Outline of Caterpillar Japan Ltd.

Company name: Caterpillar Japan Ltd.
Major activities: Manufacture and sale of construction machinery, including hydraulic excavators, wheel loaders and track-type tractors
Established: November 4, 1963
President: Noriyuki Takeuchi
Head office: 4-10-1, Yoga, Setagaya-ku, Tokyo 158-8530, Japan
Capital and shareholders: 15 billion yen, owned by Mitsubishi Heavy Industries, Ltd. (33%) and Caterpillar International Investments Coöperatie U.A. (67%)
Number of employees: 5,913 (as of December 31, 2011, consolidated)
Consolidated sales: 343.8 billion yen (fiscal 2010)