July 25 2002 – Japanese industrial electronics giants Toshiba Corp and Mitsubishi Electric Corp said on Thursday they would merge their electric power transmission and distribution systems businesses on October 1.

The operations had combined revenues of 140bn yen ($1.20bn) and would form one of the world’s three largest providers of electric power systems and transformers, they said.

The two companies announced in March a basic agreement on merging the operations into an existing 50-50 power systems venture.

Toshiba, Japan’s largest chipmaker and Mitsubishi Electric, the fourth-largest, along with Japan’s other chip and industrial electronics conglomerates have been busily restructuring and consolidating operations to regain global competitiveness.

“The business environment for electric power systems is growing more difficult due to a slump in the domestic market and intensifying competition abroad,” they said in a statement.

“We aim to create a leading company by combining our resources and bolster competitiveness in terms of cost, technology and products.” Shares in the two firms were lower in late afternoon trade.

Toshiba was down 0.62 per cent at 478 yen and Mitsubishi Electric fell 1.05 per cent to 471 yen. The Tokyo Stock Exchange’s electrical machinery index IELEC.was up 0.75 per cent. ($1=116.70 Yen).