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Business deals

Japan's Mitsubishi UFJ Lease and Hitachi Capital to merge

Combined $13bn in sales would approach Japan's second-largest leasing company

The merger of Mitsubishi UFJ Lease & Finance and Hitachi Capital comes as Japan's leasing market stagnates. (Images from companies' websites)

TOKYO -- Mitsubishi UFJ Lease & Finance and Hitachi Capital announced Thursday that the two leasing companies will merge in the coming spring. The combined company's annual sales would be about 1.4 trillion yen ($13.2 billion), close to that of Sumitomo Mitsui Finance and Leasing Company, Japan's second-largest leasing company. 

The leasing industry is facing headwinds as demand and corporate capital investment decline amid the coronavirus crisis.

The new company will start operations on April 1 next year after getting official approval from shareholders of both companies in late February. 5.10 shares of Mitsubishi UFJ Lease's common stock will be delivered by allotment for one share of Hitachi Capital's common stock.

After merging, total assets would be 10 trillion yen with net income of over 100 billion yen.  

As a result of the merger, "the two companies will become a global player in the sector in terms of size and business lines by being able to complement each other's business domains and strengthen their respective management bases," the companies said.  

The new company will be divided into five business regions -- Japan, Europe, the Americas, Greater China -- which comprises China and Hong Kong -- and Asia and Oceania. It will develop business modes based on regions "by carefully assessing the unique characteristics and circumstances of each region, with an aim to exert [a] unique presence in each region," they said in a statement.

Since May 2016, the two companies have been in a capital and business alliance to collaborate in reinforcing their respective overseas infrastructure investment businesses.

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