Kaga Electronics to acquire 70% shares in Fujitsu Electronics
The news comes off the back of Kaga’s ‘Medium-term Management Plan 2018’ (released in November 2015), in which the company emphasised a focus on increasing sales of electronic devices to existing major customers and expanding its EMS business (contracted manufacturing of electrical substrates) primarily in overseas markets. The acquisition of FEI’s shares is part of efforts to fulfil the growth strategies embodied in its medium-term management plan.
The acquisition is also expected to result in the following:
- Market share expansion for the electronic parts and semiconductor business.
- Expansion in scale of the EMS business.
- Further improvement in management efficiency through collaboration of businesses of the two companies.
“Kaga Electronics has been expanding the scope of its operations by responding to a variety of customer needs under its corporate philosophy of ‘Everything we do is for our customers’,” said Ryoichi Kado, President and Representative Director of Kaga Electronics.
“By welcoming FEI into our group, Kaga Electronics evolves into a corporate group with total net sales of about 500 billion yen and can solidify its management foundation towards the goal of becoming the industry leader in Japan, as set out in its Medium-term Management Plan. Also, by leveraging this solid management foundation and through continued efforts to expand the group’s scale and improve its management quality, we seek to achieve sustainable growth as a world-class company which can stand up to overseas competitors with their sales crossing the trillion yen mark.”
Kagemasa Magaribuchi, President and Representative Director of FSL, added, “We believe we can provide higher values, such as enhanced quality, to our existing and new customers and partners by combining FEI’s strengths and the synergies expected from the integration with Kaga Electronics. Furthermore, considering the fact that FEI has been distributing a variety of Fujitsu’s products and services, Fujitsu will continue to collaborate with FEI.
“We expected that the combination will generate new business opportunities for IoT, automotive and AI, in addition to the existing business with Fujitsu with a more comprehensive customer base and a robust product portfolio. As a member of Kaga Electronics Group, we strongly believe that FEI will be able to deliver accelerated growth.”
The transfer of 70% shares is expected to close in January 2019, subject to approval of relevant regulatory authorities and other customary closing conditions; Kaga Electronics plans to acquire the remaining 30% shares held by FSL by the end of 2021. For the present, FEI will retain its trade name of Fujitsu Electronics Inc and continue to deliver its existing offerings.
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