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Hitachi Spins Off Consumer Group

6/01/2009 02:00:00 AM Eastern

As part of its structural reform plan announced last March, Hitachi reported it will split off its consumer business group July 1 and establish a new wholly owned subsidiary called Hitachi Consumer Electronics.

Shutoku Watanabe, current Hitachi business group president and CEO, will serve as the new company's president and representative director.

Hitachi said the split was made due to the continued challenging business environment for consumer electronics products, which has forced Hitachi to “convert to a low-risk operating structure and improve earnings.”

These efforts have included “sourcing glass panel components used in plasma TVs from outside the Hitachi group and right-sizing the workforce since the previous fiscal year,” the company said.

Hitachi said the new company will allow faster decision making, which will particularly strengthen B to B businesses, such as commercial-use LCD projectors.

As a simple corporate split, the action will not require shareholder approvals under Article 805 of Japanese corporate law, Hitachi said.

The split will not impact consolidated operating results because the new company is being established as a wholly owned consolidated subsidiary of Hitachi, Hitachi said.

Revenues from the company being split off were approximately $2.2 billion (210 billion yen) on an unconsolidated basis as of March 31.

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