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TOKYO,
Japan, April 24, 2002 --- Hitachi, Ltd. (NYSE:HIT / TSE:6501) and
its wholly owned subsidiary Hitachi Telecom Technologies, Ltd., today
announced that, aiming to strengthen the Hitachi Group's systems for
communications equipment business, Hitachi and Hitachi Telecom have
decided to Strengthen the Hitachi Group's Communications Network Solutions
Business by separating Hitachi's Telecommunications Systems Division
along with other Hitachi departments that handle marketing and support
services for telecommunications equipment operations, and integrating
these units with Hitachi Telecom Technologies. This decision was finalized
at board of directors meetings of Hitachi and Hitachi Telecom held
on April 23 and April 24, respectively. The devolution and integration
process will be executed within the framework of Japan's new corporate
split-off system, which is designed to facilitate structural adjustments
within corporate groups. It will take the form of a split-off/absorption
transaction, scheduled to be implemented on October 1, 2002.
The split-off units will be formed
into a new company that will cooperate with Hitachi's R&D and systems
solutions division in making efforts to strengthen the Hitachi Group's
telecommunications network solutions business.
The accelerating trend of integrating
computers and telecommunications is combining with the progressive
expansion of broadband communications to gradually create a "ubiquitous
information society". Against this backdrop, there has been a sharp
surge in the volume of information flowing on information networks.
In light of this, continued rapid growth in demand is projected for
communications network solutions services, particularly those related
to IP networks.
Aiming to be the "best solutions partner,"
Hitachi has been taking various measures to shift the focus of its
operations to fields centered on the solutions business. Hitachi is
naturally seeking to augment its capabilities regarding telecommunications
network solutions, and is therefore working to promote the strengthening
of its telecommunications equipment operations, which provide a core
pillar of support for solutions operations.
Conditions in communications equipment
markets have been harsh, however, reflecting the end of a communications
bubble in North America as well as prolonged economic weakness in
Japan. Accordingly, Hitachi has restructured its communications equipment
business operations in North America. In contrast, Hitachi is placing
strategic emphasis on development of resources for mobile communications
and IP-related business while also taking steps to respond to rapidly
growing demand in China by establishing a sales organizational basis
for expanding its communications equipment operations there. In such
ways, Hitachi is proceeding with a strategy of increased selectivity
and resource concentration. By means of this strategy, the Company
is seeking to build a more-efficient business structure and thereby
boost its competitiveness on a consolidated basis.
To further expedite such strategic
initiatives, Hitachi decided to unify the operations of its Telecommunications
Systems Division (primarily involving the development and manufacture
of telephone switching equipment, optical transmission equipment,
mobile communications systems, and other communications equipment
marketed to carriers), marketing and support departments related to
such communications equipment, and Hitachi Telecom's operations (primarily
involving the development and manufacture of such communications equipment
marketed to corporate customers as PBX- and IP-related products).
The company will proactively develop
its broadband and mobile network equipment business, aiming to become
one of the major global players of the product, by integrating its
optical and mobile carrier network access technologies and intra-company
network technologies. As the first step, the company will correspond
to the needs of intra-company networks for broadband and telecommunications
carriers for IP respectively, taking full advantage of all opportunities
of achieving synergy, in both technological and customer base.
Hitachi will continue to be responsible for solutions/services business designed to meet the needs of such customers as communications carriers, government entities, and companies. It will therefore strive to strengthen its marketing collaboration with the newly established company. Through such efforts, Hitachi and the new company will use highly sophisticated communications network technologies to provide the systems solutions required to realize the "ubiquitous information society."
Overview of the New Company
| Name |
:
|
To be determined |
| Capital |
: |
¥3 billion |
| Representative |
: |
To be determined |
| Business scope |
: |
Manufacture and marketing of
communications-related equipment |
| Net sales |
: |
Approximately ¥60 billion (projected
figure
for the fiscal year ending March 31, 2003) |
| Number of employees |
: |
Approximately 1,540 (at
time of establishment) |
About Hitachi
Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's
leading global electronics companies, with fiscal 2000 (ended March
31, 2001) consolidated sales of 8,417 billion yen ($67.9 billion*).
The company manufactures and markets a wide range of products, including
computers, semiconductors, consumer products and power and industrial
equipment. For more information on Hitachi, Ltd., please visit Hitachi's
Web site at http://global.hitachi.com.
* At an exchange rate of 124 yen to the dollar.
About Hitachi Telecom
Hitachi Telecom Technologies, Ltd., in Fukushima, Japan is a wholly
owned subsidiary of Hitachi, Ltd. The company manufactures and markets
to corporate customers products such as PBX- and IP-related products.
For more information on Hitachi Telecom Technologies, please visit
its Web site at http://www.hitachi-com.com/
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