Mitsubishi Electric agrees to sell 51% of its power distribution equipment business to ABB for ¥82.4bn

Mitsubishi Electric has signed a contract to hand majority control of its distribution and control equipment business to ABB. The Tokyo-listed group will move the business into a new wholly owned company, then sell 51% of it to ABB's Japanese unit for a planned ¥82.4bn. Mitsubishi Electric keeps 49%. Completion is targeted for 1 October 2027 and depends on competition-law and other regulatory approvals.

What changes hands

The business makes low-voltage circuit breakers, electromagnetic contactors, measurement and control equipment, and uninterruptible power supplies of 5kVA or less for general industry. It also sells some high-voltage distribution control equipment. Mitsubishi Electric reports it within its Industry and Mobility segment.

The new company will take over development, manufacturing, sales and service for those lines. It will also take over sales and service functions for some high-voltage equipment and the development and manufacture of smart meters. Sales operations run by Mitsubishi Electric's overseas sales subsidiaries are to move to ABB's local entities in each region. Rights and obligations the business shares with other Mitsubishi Electric operations may be left out of the transfer or handled under separate contracts.

The numbers

The business had revenue of ¥102.2bn in the year to March 2026. At 31 March 2026 it carried assets of ¥69.5bn and liabilities of ¥21.9bn. Mitsubishi Electric describes all three as internal management figures that have not been audited. The asset and liability figures may change by the time the split takes effect.

The ¥82.4bn price is described as planned. The company says it was set from the business's EBITDA for fiscal 2025, an agreed valuation multiple, and adjustments for cash and debt-like items. The notice states neither the EBITDA figure nor the multiple. A price adjustment mechanism in the contract means the final amount may differ.

Mitsubishi Electric expects to book a gain of about ¥90bn on the share transfer under other income and expenses in its results for the year to March 2028. Its forecast for the current year to March 2027, published on 31 July 2026, excludes the deal. The company expects the effect on that forecast to be minor.

Control and governance

After completion the new company will be a consolidated subsidiary of ABB and an equity-method affiliate of Mitsubishi Electric. Its seven-member board is planned to include five directors nominated by ABB and two by Mitsubishi Electric. The new company's name, representative, capital and address are not yet set. Mitsubishi Electric says it will disclose them once confirmed.

Mitsubishi Electric gives the strategic case as stable domestic demand for the business. Overseas, it expects more electrification to bring both higher demand and tougher competition. It concluded that co-operating with a partner was necessary to compete globally.

Timetable and conditions

The split is a simplified absorption split under Article 784, paragraph 2 of the Companies Act. Mitsubishi Electric therefore plans to proceed without a shareholder vote. Because the successor is a wholly owned subsidiary, the company has disclosed only part of the usual split items.

The share transfer is conditional on approvals from competition authorities and other authorities in Japan and abroad, and on the contract's preconditions being met.