(Updates with comment from companies in fourth paragraph.)
Nov. 29 (Bloomberg) -- Hitachi Construction Machinery Co., the world’s largest maker of giant excavators, and Nissan Motor Co. agreed to merge their forklift operations next year to cut costs and expand in Asia.
The venture will be operated by government-backed Innovation Network Corp. of Japan, which will invest 30 billion yen ($386 million) and hold a majority stake, the three companies said today in a statement. Hitachi Construction Machinery and Nissan will own the remaining shares, according to the statement, which didn’t provide more details.
The partners will seek to expand in Southeast Asia and other emerging markets that drive global demand, the companies said. Japanese forklift-truck producers have been battered by price competition in the domestic market, dominated by Toyota Industries Corp., an affiliate of Toyota Motor Corp., a person familiar with the deal said last month.
“Many Japanese forklift manufacturers do not have sufficient scale to gain market share, even with their technological prowess,” according to the statement. Mergers, acquisitions and restructuring are “vital for them to capture business in new, growing markets,” it said.
Hitachi Construction Machinery, which has lost 30 percent of its value this year, closed up 1.7 percent at 1,353 yen on the Tokyo Stock Exchange. Nissan Motor shares gained 2.7 percent to 693 yen.
Hitachi Construction Machinery, Japan’s second-largest maker of excavators and wheel loaders, took control of TCM Corp., a forklift maker, in 2005 and acquired all the shares it didn’t already own in the company in December 2009.
Nissan Forklift Co., a wholly owned unit of Japan’s second- largest carmaker, produces 30,000 forklifts a year in Japan, Europe and the U.S., according to its website.
The automaker is scaling back businesses outside its main vehicle division as Chief Executive Officer Carlos Ghosn seeks to become the world’s largest electric-car seller.
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