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Arçelik A.Ş, owner of Beko and Grundig, acquires 60% of Hitachi Gls

A transition worth 300 million USD

Arçelik A.Ş. and Hitachi Global Life Solutions, (Hitachi Gls) have signed a share purchase agreement with the aim of forming a new joint venture company. As part of the transaction, Hitachi Gls will form a new company in which it will transfer its global home appliance business outside of Japan. Arçelik will therefore acquire 60% of the capital of the new company, which will be established by the spring of 2021, subject to regulatory approvals and compliance with other legal conditions. The transaction value is US $ 300 million on a cashless and debt-free basis for 60% of the business, which is subject to customary adjustments based on the net debt balance, the company's net working capital and stock adjustment. minority for the minority shares outstanding at the date of the agreement.

The two companies aim to build a competitive Group by exploiting the strategic complementarities of both companies and creating growth opportunities that will increase their access to new markets. Among the strategies that will be implemented: the improvement of product ranges and the guarantee of greater competitiveness through the distribution chain and production activities. In recent years, Arçelik has expanded the home appliance business in over 145 countries around the world. The company has grown significantly in Europe as well as in South Asia over the past decade. Hitachi Gls currently has its home appliances mainly in Southeast Asia and the Middle East, where it enjoys a high-end brand image.

The joint venture created between the two brands will manufacture, sell and provide Hitachi-branded after-sales services (including refrigerators, washing machines, vacuum cleaners, etc.) globally and outside the Japanese market. Both partners will benefit from their complementarity which will allow geographic coverage of sales channels and product line-ups, as well as the management synergies deriving from their collaboration. The new joint venture has twelve Hitachi Gls group companies present outside Japan (two production companies, ten distribution companies) and approximately 3,800 employees, for a total current turnover of over 100 billion JPY (approximately $ 1.0 billion). Thanks to the use of the two sales networks, Arçelik and Hitachi Gls, the joint venture will have the opportunity to expand sales of Hitachi brand products in Europe, South Asia and Africa, as well as in Southeast Asia and the Middle East. . In addition, the two groups will combine their skills in other key areas such as "Research & Development", procurement and production systems, in order to optimize the joint venture's global distribution chain and thus also strengthen its competitive positioning in the market.

Fatih Kemal Ebiçlioğlu, president of Koç Holding (Arçelik's parent company): "This joint venture is another significant achievement in our 'Silk Road' strategy. The Asia-Pacific appliance market offers an opportunity for growth thanks to the 'increase of the middle class population, the development of retail channels, the increase of family income and the development of lifestyles. We will combine our global experience, with Hitachi's strong market position and brand heritage. to grasp the needs of the global and local market". Hakan Bulgurlu, CEO of Arçelik added: "This joint venture significantly advances the global strategies of Arçelik and Hitachi and has solid prospects for future growth, as it will benefit from the synergies achieved by combining the strengths of two established players". Keiji Kojima, executive vice president and executive officer, Hitachi: "With the pandemic, remote working is becoming the new normal and the home appliance business, which has a mission to make home life safer and more comfortable, is strategically even more important for our Group. Through the establishment of this joint venture, we look forward to contributing to the improvement of people's quality of life".

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EFA News - European Food Agency
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