Fuji Electric, Fujitsu to reduce cross-shareholdings
Former parent, subsidiary re-evaluate business ties, plan investments
The companies said Tuesday that Fuji Electric will unload over 168.89 million shares in Fujitsu, including ones held by its pension trust fund, to overseas institutional investors through SMBC Nikko Securities. The offering price will be determined by Friday.
Based on Fujitsu's closing price Tuesday, the sale would total over 110 billion yen ($978 million). Fuji Electric will be left with a 2.89% stake in the technology services company.
Fujitsu also intends to sell part of its 10.41% stake in Fuji Electric, though the number of shares and timing have not been decided. The companies will cease to be each other's top shareholder once all sales are completed.
Both companies look to raise funds for growth. Fuji Electric eyes major acquisitions, mainly in social infrastructure. "We will ramp up our efforts in mergers and acquisitions," President Michihiro Kitazawa said.
Fujitsu is considering investing in artificial intelligence and buying up to 25 billion yen of its own shares.
Fuji Electric founded Fujitsu in 1935 as a subsidiary producing telephones and telephone switchboards. Since adopting a new corporate governance code, the companies have been reviewing their practice of appointing directors to each others' boards as well as their cross-shareholdings.