Mitsubishi Electric and Mitsubishi Heavy Industries to integrate power-generator businesses

Mitsubishi Electric Corporation and Mitsubishi Heavy Industries have reached a definitive agreement to integrate their power-generator systems businesses in a new joint venture.

Effective on 1 April 2024, the two firms will be share holders of the new join venture company, with Mitsubishi Electric taking a 51% stake. Mitsubishi Heavy Industries will hold the remaining 49% share.

The integration comes at a time when concerns over climate change and global warming are driving up efforts to achieve carbon neutrality and reduce greenhouse gas emissions.

In a press release, Mitsubishi Electric and Mitsubishi Heavy Industries expect practical transitions to new forms of energy like hydrogen, ammonia and other carbon-free fuels. The firms said this transition will be driven by increasing demand for electricity in growing economies and heightened concerns about energy security. Large power plants will also play an important role in balancing the variability of renewable energy due to weather and other factors.

The new joint venture aims to enhance market competitiveness for Mitsubishi Electric and Mitsubishi Heavy Industries. The integration will include thermal power generation, nuclear power generation and hydroelectric power generation businesses, as well as the design, manufacture, quality control, sales and after-sales servicing of electric generators.

“The integration is expected to strengthen the partnership between the two companies to an unprecedented level in order to expand their power-generator systems business globally and contribute to a carbon-neutral world,” said the two firms.

Details of the integration including assets, liabilities, and contracts will be specified in the absorption-type company split agreement that will be executed near the end of December 2023.