Press Information

Formal Decision Taken on Absorption-type Split of MHI's Engine Test Cell and Hush House Business to Consolidated Subsidiary

No.2034
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Tokyo, December 6, 2016 - As announced on October 18, 2016, effective April 1, 2017 Mitsubishi Heavy Industries, Ltd. (MHI) is planning to transfer its business operations in engine test cells and hush houses to Mitsubishi Heavy Industries Mechatronics Systems, Ltd. (MHI-MS), a wholly owned Group company, through an absorption-type company split arrangement. Today, a formal decision was taken on concluding the absorption-type split agreement with MHI-MS as described below. Because the split involves a business transfer to a consolidated subsidiary, some disclosure details and contents have been omitted.

1. Aims of the Company Split

The decision to transfer MHI's engine test cell and hush house business operations to MHI-MS was taken in view of the close technological affinity of those products with the testing equipment and other machinery systems manufactured by MHI-MS. By transferring the relevant operations to MHI-MS, benefits are expected in terms of more effective use of human resources and expansion of related business.

2. Overview of the Company Split

(1) Schedule

Contract signing December 6, 2016
Effective date April 1, 2017 (subject to change)

* As the company split will be a simple absorption-type split pursuant to Article 784, Paragraph 2 of the Companies Act of Japan, approval at a general shareholders meeting as stipulated in Article 783, Paragraph 1 of that Act is not required.

(2) Company Split Method

This will be a simple absorption-type split, with MHI as the splitting company and MHI-MS as the successor company.

(3) Allocation Relating to Company Split

Coinciding with the company split, MHI-MS will issue 1,000 shares of common stock to be allocated in full to MHI.

(4) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition Rights Accompanying the Company Split

Obligations based on the stock acquisition rights of MHI, the splitting company, will neither be transferred to nor succeeded to by MHI-MS, the successor company. MHI has not issued any bonds with stock acquisition rights.

(5) Changes in Capital Amount Accompanying the Company Split

The company split will result in no decrease either in MHI's capital or in its capital reserve.

(6) Rights and Obligations Transferred to the Successor Company

  • 1)The successor company will succeed to the intellectual properties and related assets, rights and obligations pertaining to the engine test cell and hush house business of the splitting company (with the exception of anything stipulated as exempt in the split agreement).
  • 2)Any and all liabilities or other obligations of the splitting company which the successor company succeeds to shall be succeeded cumulatively.

(7) Outlook on Performance of Obligations

Any obligations which the splitting company and the successor company should bear as a result of the company split will be duly met.

3. Outline of the Companies Involved in the Company Split

  Splitting Company
(as of March 31, 2016)
Successor Company
(as of March 31, 2016)
(1) Name Mitsubishi Heavy Industries, Ltd. (MHI) Mitsubishi Heavy Industries Mechatronics Systems, Ltd.(MHI-MS)
(2) Head Office 16-5, Konan 2-chome, Minato-ku, Tokyo 4-22, Wadamiya-dori 5-chome, Hyogo-ku, Kobe, Japan
(3) Representative Shunichi Miyanaga
President and CEO
Tadashi Nagashima
President
(4) Business Manufacture, etc. of ships, marine engines, power systems, machinery, steel structures, aircraft, aerospace systems, industrial machinery, special vehicles, etc. Design, manufacture, installation, marketing, repair, modification and maintenance of the following products:
* Intelligent transportation systems (ITS): toll collection systems, electronic toll collection systems, other ITS-related equipment
* Hydraulic machinery: hydraulic components, deck machinery, deck cranes, air-heaters, other hydraulic and mechanical equipment
* Machinery systems: testing equipment, inspection systems, culture and sports facilities, space equipment, thermal plants, systemcontrollers, electronic control equipment, particle accelerators, penstocks, other industrial and general-purpose mechanical equipment
* Mechanical parking systems: mechanical parking facilities, other transfer systems
* Steel structure plants: industrial chimneys, seismic isolation and vibration control systems, gas holders, steel structures (including steel pipe), other steel structure products, road infrastructure maintenance machinery and equipment (bridge inspection vehicles, tunnel sprinkler spray performance measurement vehicles, etc.)
* Food processing and packaging machinery: food processing machines, food packaging machines, peripheral components and plant systems
(5) Capital 265,608 million yen 1,060 million yen
(6) Establishment January 11, 1950 December 2, 1968
(7) Number of issued shares 3,373,647,813 201,000
(8) Fiscal year end March 31 March 31
(9) Major shareholders and shareholdings
  • Japan Trustee Services Bank, Ltd. (Trust Account)
4.68%
  • The Master Trust Bank of Japan, Ltd (Trust Account)
3.87%
  • The Nomura Trust and Banking Co., Ltd. (Retirement Allowance Trust, The Bank of Tokyo-Mitsubishi UFJ, Ltd. Account)
3.72%
  • Meiji Yasuda Life
2.37%
  • The Bank of New York Mellon SA/NV 10
1.99%
Mitsubishi Heavy Industries, Ltd. 100%
(10) Fiscal Status and Earnings Results during the Most Recently Completed Fiscal Year
  Splitting company (consolidated) Successor company
(non-consolidated)
Net assets 1,998,078 million yen 39,904 million yen
Total assets 5,491,799 million yen 78,090 million yen
Net assets per share 500.30 yen 198,527.60 yen
Revenues 4,046,810 million yen 75,319 million yen
Operating income 309,506 million yen 8,673 million yen
Ordinary income 272,500 million yen 8,423 million yen
Net income 63,834 million yen 8,067 million yen
Net income per share 19.02 yen 40,137.69 yen

(11) Description of Business being Split or Succeeded to

Design, manufacture, construction, marketing and after-sale servicing of engine test cells and hush houses (including business auxiliary to the foregoing)

(12) Earnings of Business being Split or Succeeded to

  Business being split (a) MHI total (consolidated) in FY ended March 2016 (b) Percentage (a/b)
Revenues 648 million yen 4,046,810 million yen 0.016%

(13) Assets and Liabilities of Business being Split or Succeeded to

Assets 2.4 million yen
Liabilities 0.7 million yen

4. Status of Splitting Company after Split

(1) Name Mitsubishi Heavy Industries, Ltd.
(2) Head Office 16-5, Konan 2-chome, Minato-ku, Tokyo
(3) Representative Shunichi Miyanaga, President and CEO
(4) Business Manufacture, etc. of ships, marine engines, power systems, machinery, steel structures, aircraft, aerospace systems, industrial machinery, special vehicles, etc.
(5) Capital 265,608 million yen
(6) Fiscal year end March 31

5. Status of Successor Company after Split

(1) Name Mitsubishi Heavy Industries Mechatronics Systems, Ltd.
(2) Head Office 4-22, Wadamiya-dori 5-chome, Hyogo-ku, Kobe, Japan
(3) Representative Tadashi Nagashima, President
(4) Business Design, manufacture, installation, marketing, repair, modification and maintenance of the following products:
* Intelligent transportation systems (ITS): toll collection systems, electronic toll collection systems, other ITS-related equipment
* Hydraulic machinery: hydraulic components, deck machinery, deck cranes, air-heaters, other hydraulic and mechanical equipment
* Machinery systems: testing equipment, inspection systems, culture and sports facilities, space equipment, thermal plants, system controllers, electronic control equipment, particle accelerators, penstocks, other industrial and general-purpose mechanical equipment
* Mechanical parking systems: mechanical parking facilities, other transfer systems
* Steel structure plants: industrial chimneys, seismic isolation and vibration control systems, gas holders, steel structures (including steel pipe), other steel structure products, road infrastructure maintenance machinery and equipment (bridge inspection vehicles, tunnel sprinkler spray performance measurement vehicles, etc.)
* Food processing and packaging machinery: food processing machines, food packaging machines, peripheral components and plant systems
(5) Capital 1,060 million yen
(6) Fiscal year end March 31

6. Outlook

Impact from the company split on MHI's earnings will be minimal, on both a consolidated and non-consolidated basis.