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ABB and Hitachi join forces in Japanese deal

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ABB and Hitachi join forces in Japanese deal
Photo: ABB
09:22 CET+01:00
Japan's Hitachi and Swiss engineering giant ABB said Tuesday they will set up a joint venture to market power transmission equipment in Japan, as Tokyo deregulates the heavily protected sector.

The deal would see Hitachi and ABB take a 51 percent and 49 percent stake in the new business, respectively, they said in a joint statement.
   
"This is the first step of a strategic partnership between Hitachi and ABB to contribute to the evolution of Japan's power network," it said.
   
"Hitachi and ABB will explore further strengthening of the relationship and address opportunities to widen the scope for future collaboration."
   
No financial details were released.
   
Hitachi will appoint the new firm's chief executive, Japan's leading Nikkei business daily reported earlier, without citing sources.
   
The news comes as Japanese Prime Minister Shinzo Abe, fresh from Sunday's landslide parliamentary election victory that rekindled his political capital, pledged to pursue economic policies that include cutting red tape.
   
Electricity power generation and sales in Japan — which had been monopolized by ten regional utilities — have been partly deregulated and will be fully liberalized in 2016 under Abe's plan.
   
Separating power generation from transmission is also being considered.
   
The developments are key to the Hitachi-ABB joint venture, which is hoping to tap into the market for electricity transmission equipment.
   
The new firm, to be based in Tokyo, "will be responsible for the design, engineering, supply and after-sales services related to" technology used for transmitting electricity between two grid systems, the joint statement said.
   
"The system is ideal for long-distance transmission due to its ability to minimize electricity losses and to its lower space requirements and construction costs.
   
"It is also suited well for interconnections between two different frequencies" required in the Japanese market, it added.
   
By joining forces, Hitachi and ABB also hope to compete on a stronger footing with US engineering titan General Electric and other overseas giants in the global market.

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