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Toyo Engineering Works Becomes MHI's Wholly Owned Group Company
-- Move Taken to Maximize Use of Both Companies' Management Resources In Quest to Drive Refrigeration Business Expansion --

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Tokyo, January 31, 2014 - Mitsubishi Heavy Industries, Ltd. (MHI) has made Toyo Engineering Works, Ltd., one of Japan's leading refrigeration and environmental engineering companies, a wholly owned group company through acquisition of 100% of the company's issued shares. The move will enable further strengthening of the links between MHI and Toyo Engineering Works and generate synergy merits through collaboration throughout the value chain, including technology, sales and production. In this way, MHI aims for further expansion of its air-conditioning and refrigeration systems business.

Toyo Engineering Works was founded in 1952 through joint capital participation by MHI and Nichirei Corporation (then known as Nippon Reizo Co., Ltd.). As a comprehensive refrigeration and environmental engineering firm, Toyo Engineering Works has long engaged in the design, manufacture, installation and repair of refrigeration, air-conditioning, environmental and other systems and equipment.

At Expo 2005 taken place in Aichi, Japan, Toyo Engineering Works provided a refrigeration system using environmentally-friendly natural refrigerant to the Mammoth Pavilion, which exhibited a part of mammoth recovered from permanently-frozen ground in Russia. As such, the company has been continuously developing new technologies, mainly focusing on natural refrigerant, which resulted in current compact, high-efficiency refrigeration/cooling systems. In this way, Toyo Engineering Works enjoys a robust reputation for its advanced proprietary technologies in refrigeration, heat recovery and natural refrigerants, for its expansive lineup of products backed by these technologies, and for its business operations leveraging its nationwide sales and service networks.

For many years MHI and Toyo Engineering Works have been in a loose collaborative relationship, with Toyo Engineering Works being an MHI equity-method affiliate. However, MHI deemed that, by making it a wholly owned group company, MHI will be able to provide support for acceleration and realization of business development necessary for Toyo Engineering Works. For Toyo Engineering Works, enhancement of activities in overseas market has been an urgent matter to be addressed, which the company will become able to accelerate leveraging MHI's international operation knowhow and business infrastructures.

In engineering business, utilization of heat that is produced in various plants has become a subject to be addressed from a viewpoint of global warming prevention. Toyo Engineering Works has thermal usage technologies, including heat recovery and CO2 collection using cooling technology. Leveraging those technologies, MHI will be able to enhance competitiveness of its plants at the same time expanding Toyo Engineering Works' business. In the field of low-temperature engineering, where regulations on fluorocarbon refrigerant are becoming tight, MHI possesses advanced technology, including compressors that do not use chlorofluorocarbon (CFC), which Toyo Engineering Works becomes able to use in business expansion and strengthening of its engineering base.

In air-conditioning system business, Toyo Engineering Works has a capability to accommodate works and services for peripheral equipment of air-conditioners that MHI does not handle, as well as works and services for chillers. Combining its capability with MHI's air-conditioning system services, the company will be able to expand service business. By reviewing duplicated area in service business structures of the two companies, work process can be streamlined. Allocating resources that have become available by streamlining to explore demands, sales expansion of service business is expected.

Considering those factors, MHI, first in its history, made a tender offer for Toyo Engineering Works's issued shares in a quest to convert it from an affiliate to a wholly owned group company. After taking various procedures, MHI has completed full acquisition of Toyo Engineering Works's issued shares.

Going forward, through even closer ties with Toyo Engineering Works, coupled with optimal utilization of both companies' management resources, MHI aims to successfully win out in this severe market environment and pursue more efficient business as a way of increasing the business value of both firms.