Hitachi to mull US$640 million stake sale in machinery firm

[TOKYO] Japanese industrial electronics maker Hitachi is looking to offload about 8 per cent of Hitachi Construction Machinery shares in block trades, according to people familiar with the matter.

The amount could be around US$638 million based on the market value of the machinery company, one of the people said, asking not to be identified as they were discussing sensitive information.

This comes after Hitachi sold some of its holdings in block trades in November. A 180-day lockup that restricted Hitachi from selling the shares expired last week. Hitachi’s stake would drop to about 10 per cent after the sale.

Hitachi and Hitachi Construction Machinery’s representatives were not immediately available to comment.

Hitachi has been divesting some of its assets to focus on core businesses including IT services and energy, and its exit from loss-making operations was seen as a symbol of corporate Japan’s transformation. Hitachi agreed last month to sell its home appliances business to electronics retailer Nojima as it continues to streamline operations.

Large private transactions known as block trades are gaining traction in Japan as companies seek quicker, more flexible ways to offload holdings. With a push from the Tokyo Stock Exchange and regulators to unwind so-called cross-shareholdings and improve capital efficiency, block trades reached at least 1.4 trillion yen last year – the highest level on record, according to data compiled by Bloomberg going back to 2002. BLOOMBERG