Mitsubishi Electric Corporation (TOKYO: 6503) and Mitsubishi Heavy Industries, Ltd. (TOKYO: 7011) announced today that they have reached a definitive agreement to integrate their power-generator systems businesses under a joint venture. As previously announced, the two firms agreed in principle last December 26 on a plan to transfer their respective businesses focused on power-generator systems to a proposed joint-venture company, which Mitsubishi Electric and Mitsubishi Heavy Industries will both be the shareholder, effective April 1, 2024.

Today, the two companies have signed definitive agreements specifying the terms and conditions of integrating their power-generator systems businesses, the details of which are outlined below. Prior to the establishment of the joint-venture company, a preparatory company will be established in due course, after which the remaining details will be finalized by the three parties by around the end of December 2023.

1. Purpose of Integration

Climate change due to global warming is triggering accelerating efforts worldwide to achieve carbon neutrality by reducing greenhouse gas emissions to net zero. Increasing demand for electricity in growing economies, particularly emerging markets, and heightened concerns about energy security, are expected to drive practical transitions to new forms of energy, such as hydrogen, ammonia and other carbon-free fuels, alongside existing thermal-power generation. Large power plants, which have served as the backbone of power infrastructure so far, will play an important transitional role in balancing the variability of renewable energy due to weather and other factors.

In the midst of such market changes, Mitsubishi Electric and Mitsubishi Heavy Industries have agreed to integrate related businesses, technologies and assets to enhance market competitiveness. 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.

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