TOKYO (Reuters) - Toshiba Corp (6502.T) and General Electric Co (GE.N) will enter a global strategic alliance to develop and sell fossil-fuel power equipment and consider a joint venture in the business, the firms said on Thursday.
The deal comes after domestic rivals Mitsubishi Heavy Industries (7011.T) and Hitachi Ltd (6501.T) said they would combine their thermal power businesses in November due to increased competition from the likes of Siemens <SIEGn.
Under the memorandum of understanding signed on Thursday, Toshiba and GE said they will “...explore the formation of a strategic joint venture for the development of next-generation combined-cycle power projects with higher levels of thermal efficiency”.
The two firms have cooperated in gas turbine power generation systems since 1982, the companies said.
The Nikkei business newspaper earlier reported the firms plan to have equal stakes in the joint unit, which may be launched as early as this year.
Toshiba shares rose 1.4 percent to 370 yen, against a flat benchmark Nikkei average .N225.
Reporting by Mari Saito in Tokyo and Chandni Doulatramani in Bangalore