March 26,2009
Fuji Electric Holdings Co., Ltd.
Fuji Electric Holdings Co., Ltd. (Headquarters: Shinagawa-ku, Tokyo; President and Representative Director: Haruo Ito; hereinafter referred to as “FHC”) announced today that Fuji Electric Systems Co., Ltd. (Headquarters: Shinagawa-ku, Tokyo; President and Representative Director: Mitsunori Shirakura; hereinafter referred to as “FES”), its one of operating companies, Fuji Electric Hi-Tech Corporation (Headquarters: Minato-ku, Tokyo; President and Representative Director: Shinji Arai; hereinafter referred to as “FH”), a wholly owned subsidiary of FES, and TDK-Lambda Corporation (Headquarters: Shinagawa-ku, Tokyo; President and Representative Director: Takeo Suzuki; hereinafter referred to as “TLJ” ), one of subsidiaries of TDK Corporation (Headqurters: Chuo-ku, Tokyo; President and COO: Takehiro Kamigama; hereinafter referred to as “TDK”), have agreed, in principle, that FH merges the uninterruptible power supply (UPS) businesses of FES and TLJ with its internal power supply business, and the three parties have discussions for the consolidation.
1. Objectives
The Fuji Electric Group expects that the merger between FES and TLJ will create synergy that leads to acceleration of new product development, cost reduction and expansion of sales channels. Furthermore, by consolidating their UPS businesses with the internal power supply business of FH, which primarily deals with custom power supplies, the Fuji Electric Group aims to make FH a distinctive power supply manufacturer.
The key objectives of this merger include:
| (a) |
Aiming to win the top share in the Japanese UPS market |
| |
By consolidating the UPS businesses of FES and TLJ, which have been in alliance through a mutual supply of UPS products etc., the Fuji Electric Group will strive to expand the business and take market share from competitors to be the number one manufacturer in the Japanese middle- to large-capacity (10kVA or larger) UPS market. |
| (b) |
Bringing out technological synergy |
| |
TLJ and FES have strengths in small- to middle capacity UPSs and large-capacity UPSs respectively. By combining the both companies’ software and hardware technologies, the Fuji Electric Group will promote an efficient product development. |
| (c) |
Accelerating overseas business expansion |
| |
By capitalizing on the overseas production centers of TLJ, the Fuji Electric Group will increase its overseas production ratio to pursue a further cost reduction. Furthermore, by partnering with the overseas manufacturers with which TLJ has technology alliances, the Fuji Electric Group will strive to accelerate its business expansion to China and the Southeast Asia. |
2. Future Outlook
| (1) |
Target business size |
| |
The Fuji Electric Group will aim to increase its UPS sales from ¥30 billion, the current combined UPS sales of FES, FH and TLJ, to about ¥50 billion in three years. |
| (2) |
Focusing on energy and environment fields |
| |
The Fuji Electric Group will focus on the green IT market, which expects a further growth, by marketing high-efficiency UPSs that help reduce CO2 emission. The group will also expand the solution business by combining UPS products with other systems that utilize alternative energy or help efficient use of energy. The group’s product lineup will also be enhanced by applying UPS technology to create new power conditioners that can be used for photovoltaic power generation. The expected synergy with the solar cells offered by FES will enable the group to tap new market. |
| (3) |
Enhancing development of next generation products |
| |
The Fuji Electric Group is promoting development of the super-efficiency UPSs incorporating next generation power semiconductors (SiC/GaN) that help customers save energy. This development will be accelerated through an effective utilization of the each company’s technology. |
| (4) |
Upgrading product portfolio |
| |
In light of an increase of DC power supplied devices and the technological convergence between small UPSs and internal power supplies (specifically, custom power supplies), the Fuji Electric Group will accelerate its new product development to provide a wider range of power supply offerings. Furthermore, new business models will be explored to offer packaged solutions including hardware and services. |
3. Outline of Merger
| (1) |
Method of merger |
| |
The UPS businesses of FES and TLJ will by merged into FH as of October 1, 2009 through an absorption-type corporate split. |
| (2) |
Schedule of merger |
| |
Meeting of board of directors to approve the memorandum of agreement: March 26, 2009
Execution of the MOU: March 26, 2009
Scheduled date of merger: October 1, 2009
Note: the date of merger is subject to change through discussions among the parties. |
| (3) |
Shareholding ratio after merger |
| |
FES is expected to own a majority of shares in the consolidated company. |
Customer Inquiry:
Sales Planning Dept.
Sales Group
Fuji Electric Systems
Tel. +81-3-5435-7020
Operation Dept.
Fuji Electric Hi-Tech Corporation
Tel. +81-3-3438-0411
