Mitsubishi Electric will move its distribution controls business into a new company and sell 51% to ABB’s Japan unit for a planned ¥82.4 billion. The venture is due to launch Oct. 1, 2027, with Mitsubishi Electric retaining 49%.
Key facts
Mitsubishi Electric will first transfer its power distribution and control equipment business to a wholly owned new company, then sell 51% of the new company’s shares to ABB’s Japanese subsidiary, ABB K.K. After the transaction, ABB is expected to own 51% and Mitsubishi Electric 49%. The new company will be consolidated by ABB and accounted for under the equity method by Mitsubishi Electric.
| Procedure | Planned date |
|---|---|
| New company established | Dec. 1, 2026 |
| Company split agreement signed | Aug. 1, 2027 |
| Company split takes effect | Oct. 1, 2027 |
| Share transfer completed | Oct. 1, 2027 |
The new company is planned to be established as a wholly owned subsidiary of Mitsubishi Electric, with the share transfer taking place immediately after the company split. The split is planned as a simplified absorption-type company split, which Mitsubishi Electric says will not require approval at a shareholders meeting.
The target business recorded sales of ¥102.2 billion in the fiscal year ended March 2026. Mitsubishi Electric aims to combine its product strengths and customer base in Japan with ABB’s technology and global sales network to drive growth and strengthen competitiveness.
The sales figure is an internal management figure and has not been audited. Mitsubishi Electric opted for joint operation with ABB, citing stable expected demand for the business in Japan, alongside growing demand as electrification spreads overseas and intensifying competition.
Mitsubishi Electric expects to record a gain of about ¥90 billion related to the transaction in “other gains and losses” in its consolidated results for the fiscal year ending March 2028. The transaction’s impact is not included in its consolidated earnings forecast for the fiscal year ending March 2027, and is considered minor at this stage.
The gain of about ¥90 billion is an accounting effect associated with the share transfer and is expected to be reflected in earnings for the fiscal year ending March 2028. Mitsubishi Electric says the impact on its fiscal 2027 earnings forecast is minor, so the expected gain alone does not indicate the underlying business’s profitability or recurring earnings power.
After the company split, the new company will operate the target business. Following the share transfer, it will run the business as an ABB subsidiary. Mitsubishi Electric says it will take steps to maintain the supply of products to customers and business partners.
The target business covers development, manufacturing, sales and service, and overseas sales are also planned to move to ABB’s local subsidiaries. The disclosure does not provide details on employee employment terms or staffing arrangements. The new company’s name, location and representative are also scheduled to change after the share transfer, with details to be decided later.
Analyst take
The deal brings in ABB as a majority partner with global reach while Mitsubishi Electric retains its technology and customer base in Japan, as well as a 49% stake. Investors will want to track not only the roughly ¥90 billion transaction-related gain, but also growth at the joint venture and the earnings Mitsubishi Electric receives through its retained interest. The key is to distinguish a one-time gain from sustainable business growth.
