Hitachi Limited will sell its metals division to a consortium led by global private equity firm Bain Capital, according to a statement earlier this morning. The deal is estimated at 817 billion yen (~7.5 billion USD) and entails a buyout of all outstanding shares.
Under the terms of the agreement, each share of Hitachi Metals wll be purchased for 2,181 yen, a 15.8% premium over Tuesday’s close. Hitachi, which owns 53% of Hitachi Metals, will sell its full stake for a total of 382 billion yen. As a result of these transactions, Hitachi Metals will be delisted from the TSE.
This sale will come as little surprise to those watching Hitachi in recent months, as the company has acquired and divested tens of billions of dollars of businesses to pivot out of the electronics hardware industry. Mergers and acquisitions focusing on transforming a company’s core businesses are often challenging, but Hitachi seems highly committed to staking a claim in the digital services business.
The members of the consortium purchasing Hitachi Metals are primarily private equity firms, all looking to expand into Japan. Some notable partners in the Bain-led group are the Carlyle Group and KKR & Co. Hitachi Metals has suffered multiple consecutive annual net losses as well as media scandals including falsified quality test results, and has been pursuing buyers for at least two years.