Japan's Hitachi plans to sell chemical unit, sources say

(Reuters) - Japan’s Hitachi Ltd plans to sell its majority stake in Hitachi Chemical, two sources with direct knowledge of the matter told Reuters, in what would mark the latest deal by the sprawling conglomerate to streamline its businesses.

Hitachi, Japan’s largest manufacturer by revenue apart from automakers, has been reorganizing its structure in recent years, selling non-core assets while investing in energy and other businesses where it sees opportunities.

The sale of Hitachi Chemical could start as early as next month, one of the sources said, adding that the unit could attract strategic suitors as well as buyout funds. Both sources declined to be identified as the information is not public.

Hitachi said in an emailed statement it had not made any formal decision on selling its stake in the business, while adding it was considering the enhancement of its corporate value.

It was not immediately clear how much of its 51.2 percent stake in the chemical unit Hitachi could sell. The holding was worth nearly 280 billion yen ($2.50 billion) as of Wednesday’s close. Shares of Hitachi Chemical surged nearly 10 percent on Thursday after the Nikkei newspaper first reported the potential sale.

Hitachi last year agreed to buy a majority stake in ABB’s power grid unit. On Wednesday it said it would acquire U.S. firm JR Automation Technologies, which makes logistic systems using industrial robots, for $1.4 billion.

Its divestitures include semiconductor equipment maker Hitachi Kokusai Electric Inc and the power tool unit Hitachi Koki, both of which were sold to U.S. buyout firm KKR & Co

The sale could see Hitachi Chemical split into different units, one of the sources said.

Reporting by Junko Fujita; Additional reporting by Nikhil Kurian Nainan in Bengaluru; Editing by David Dolan and Muralikumar Anantharaman