TOKYO -- Hitachi has begun accepting bids for listed unit Hitachi Metals, Nikkei has learned, looking to unload what was once considered a core subsidiary as it nears the end of a major group realignment.
Big American investment funds including Bain Capital and KKR are reportedly considering offers. Hitachi, which owns roughly 53% of the unit, plans to narrow down the candidates within the month in preparation for choosing a buyer.
Hitachi is restructuring the group toward a growth strategy centering on information technology, and Hitachi Metals, whose strengths include specialty steel for autos and aircraft, is seen as having little synergy with this new direction. Hitachi also plans to sell half its 51% stake in Hitachi Construction Machinery as part of this realignment.
Because Hitachi Metals produces materials for defense equipment, there have been concerns about the prospect of its sale to a foreign buyer. The public-private Japan Investment Corp. could partner with funds that bid for the company to create a Japanese-American consortium.
Hitachi Metals was once considered one of Hitachi's three main units, along with Hitachi Chemical, which was acquired by Showa Denko in April, and Hitachi Cable, which was absorbed by Hitachi Metals in 2013.
The metal manufacturer is expected to report a net loss of 46 billion yen ($443 million) for the fiscal year ending in March, amid a slump in the auto industry on top of a scandal involving falsified quality control test reports that came to light in April. The company announced a turnaround plan last month that includes cutting about 10% of its personnel by fiscal 2021.