Siemens, Mitsubishi Heavy Industries form Joint Venture for Iron, Steel and Aluminum

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Siemens AG (NYSE:SI) (Munich, Germany) has entered into a joint venture with Mitsubishi Heavy Industries (OTC:MHVYF) (MHI) (Tokyo, Japan) to provide plants, products and services for the iron, steel and aluminum industries.

Both companies will contribute their metallurgical industry activities to the joint venture. MHI will hold a 51% share in the joint venture, and Siemens will hold 49%. The venture is expected to begin operations in January 2015.

The joint venture, which will be headquartered in the U.K., will integrate Mitsubishi-Hitachi Metals Machinery, an MHI-consolidated group company, with equity participation by Hitachi Limited and IHI Corporation. It will have about 9,000 employees.

The portfolios of the two partners will be complementary, with the technological strengths of Siemens Metals Technologies (SMT) in iron and steel production, casting, automation, environmental technologies and lifecycle services, matched with MHI's technological competence in hot and cold rolling, processing and production.

The companies claim that the joint venture can offer its customers the entire value chain in iron, steel and aluminum production, from technologies for processing raw materials to surface finishing at the end of the production process, as well as the related lifecycle competencies.

A Siemens spokesman said that by drawing on the centers of competence of SMT in Central Europe and those of MHI in Asia, the joint venture has a solid regional set-up. Regionally, the market has made a marked shift to Asia. More than 50% of the world's steel production now takes place in China, with growing competition from local technology providers.

The value to the partners in this, and other macro mergers, also lies in the access it gives to experienced and expert personnel, who are in short supply globally.

For related information, see May 8, 2014, article - Siemens Agrees to Acquire Rolls-Royce Energy's Turbine Business for $1.3 Billion, and May 2, 2014, article - Siemens, Rolls Royce, Alstom, GE and Daimler Play High-Stakes Power Acquisition Game.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.