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MHI to Integrate 2 Air-Conditioning & Refrigeration Subsidiaries to Enhance Business in Japan; New Company to be Launched in October as "Mitsubishi Heavy Industries Air-Conditioning and Refrigeration Corp."

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Tokyo, August 1, 2013 - Effective October 1, Mitsubishi Heavy Industries, Ltd. (MHI) will launch Mitsubishi Heavy Industries Air-Conditioning and Refrigeration Corporation by integrating two of its group companies in Japan that currently handle sales, installation and after-sale servicing of air-conditioning and refrigeration (AC&R) system products. By consolidating the two companies' respective strengths as a way of exploring new markets, MHI aims to establish a business structure that will provide enhanced support to its AC&R business.

The group companies to be integrated, both wholly owned by MHI, are Mitsubishi Heavy Industries Air-Conditioning & Thermal Systems Corporation (Juko-Kucho), which handles residential-use and commercial-use air-conditioning, heating, freezing and refrigeration products; and Mitsubishi Heavy Industries Air-Conditioning & Refrigeration Systems Corporation (MACS), which engages in centrifugal chillers. In undertaking the merger of their operations, Juko-Kucho will absorb MACS and relaunch under the new corporate name of "Mitsubishi Heavy Industries Air-Conditioning and Refrigeration Corporation."

The new company will be capitalized at 400 million yen and have its head office in Shinagawa, Tokyo. Its business scope will encompass sales, installation and after-sale servicing of air-conditioners, heating systems, freezing and refrigeration systems, and centrifugal chillers. Operations will initially get under way with 490 employees under the leadership of president Junzo Satoh, currently Deputy General Manager of MHI's Air-Conditioning & Refrigeration Systems business headquarters.

Recently the Japanese market has been seeing sharply expanding demand for chillers and heat-pump water heaters, which are positioned midway between air-conditioners and centrifugal chillers in terms of capability. The two group companies to be merged have strengths in these respective and mutually complementary fields. Juko-Kucho's strength is in equipment sales to a broad network of sales agents and high-volume retailers, while MACS's advantages are in direct marketing to customers and in maintenance service areas. Against this backdrop, MHI deemed that integrating the two companies is necessary in order to achieve future AC&R business development.

After the integration, MHI looks for the new company to optimize the synergistic merits from the merger by conducting integrated marketing activities targeting new markets and by further enhancing its solutions business, including maintenance services. MHI intends to closely collaborate with the new firm and fully support its business development.