(Bloomberg) — Hitachi Ltd. is nearing a deal to sell its 40% holding in Hitachi Transport System Ltd. to KKR & Co., which is planning a tender offer to take the logistics company private, people with knowledge of the matter said.
The Japanese conglomerate could make an announcement as soon as Thursday, said the people, who asked not to be identified because the negotiations are private. KKR is investing a total of about 700 billion yen ($5.5 billion), the people said.
Hitachi intends to re-invest and own around 10% in Hitachi Transport after KKR’s acquisition and the unit’s delisting, with KKR holding the rest, the people said. KKR beat out rivals including Blackstone Inc., Bain Capital and Baring Private Equity Asia in the process, they added.
Once a sprawling conglomerate and the country’s biggest loss-maker, Hitachi has been divesting assets to focus on its core businesses of power grids, nuclear energy, automotive parts, train infrastructure and industrial products, linking many of them with its own software. Hitachi Construction Machinery Co., Hitachi Metals Ltd., and Hitachi Kokusai Electric Inc. are all targeted for sale, or are in the process already.
Read more: Hitachi’s $18 Billion Divestment Drive Kept Activists at Bay
A purchase of Hitachi Transport stake will mark another significant deal for KKR in the region. The U.S. private equity firm last week led a consortium in offering to acquire Australian hospital operator Ramsay Health Care Ltd. for about $15 billion, which could be KKR’s biggest ever buyout in Asia Pacific.
While negotiations are at an advanced stage, they could still be delayed or fall apart, the people said. A sale of Hitachi Transport is being considered, but nothing had been decided, a representative for Hitachi said in response to Bloomberg queries, without providing more details. A representative from KKR declined to comment.
Hitachi shares fell 2.3% on Tuesday. The Nikkei newspaper reported last week that KKR was set to make a tender offer to take Hitachi Transport private.
(Updates with KKR deal in region in fourth paragraph.)
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