Hitachi Zosen signed agreement with Imabari Shipbuilding for Spin-off of the Marine Engine Business and Acceptance of Investment

September 28, 2022

At the Board of Directors held, Hitachi Zosen Corporation resolved to establish a new company by spinning off our marine engine business (hereinafter referred to as ” the business” and including the manufacturing and after-sales service business of marine engines) and to enter into a basic agreement on accepting a 35% capital participation from Imabari Shipbuilding through a third-party allotment of shares by the new company.

The Company and Imabari Shipbuilding intend to hold the Board of Directors to approve the conclusion of the definitive agreement for this transaction at each company during December 2022 and seek to obtain approval.

I. Purpose of this transaction
In 1940, the Company started manufacturing marine engines as the only domestic double licensees of MAN Energy Solutions SE (Germany) and Winterthur Gas & Diesel Ltd.(Switzerland), the world’s two largest brand manufacturers of marine engines, and have manufactured a cumulative total of 42,850,000 horsepower and 2,975 units (as of September 26, 2022) for shipbuilders in Japan and overseas. The business the Company is engaged in, as well as the shipbuilding business conducted by Imabari Shipbuilding, is experiencing severe business conditions due to intensifying competition both domestically and overseas and volatile prices of steel and other resources. In recent years, the expected level of technology has risen further, including the conversion of marine engines to fuels for carbon neutral and the development of zero-emission vessels.

Under the increasingly challenging business environment in recent years, we have continued to consider ways to strengthen our competitiveness by rebuilding our business structure in anticipation of further changes in the business environment in the future, and to improve profitability through efficient business operations. Against this backdrop, the Company and Imabari Shipbuilding believe that this transaction will contribute to the stable supply and procurement of marine engines, as well as boosting sales by strengthening the sales supply network, improving profitability through cost reductions utilizing the material procurement capabilities of Imabari Shipbuilding, securing funds for development investment, and strengthening the development system. Through this transaction, the Company aims to continuously increase the corporate value of the Company and Imabari Shipbuilding.