Japanese conglomerate Hitachi is planning to sell a core subsidiary to major chemical maker Showa Denko. Sources say negotiators are now working on the deal for Hitachi Chemical.
Hitachi has a 51-percent stake in the subsidiary, which is listed on the First Section of the Tokyo Stock Exchange.
if the two sides reach an agreement, Showa Denko is expected to launch a tender offer. The combined sales of Showa Denko and Hitachi Chemical are over 15 billion dollars.
The subsidiary is one of the three core units of the Hitachi group. The firm makes a wide range of products, including automotive parts and materials for semiconductors and lithium-ion batteries.
Hitachi's willingness to let go of the subsidiary underscores its strategy of improving profitability by concentrating on information technology, infrastructure for public services and other high-growth areas.