Kobelco excavator and crane businesses to merge

By Chris Sleight21 May 2015

Kobelco’s parent company, Kobe Steel is looking to merge of its Kobleco Construction Machinery and Kobelco Cranes subsidiaries. Although a company statement said it is “considering” the move, it added that it was aiming to complete the merger by April 1, 2016, the start of the next fiscal year.

Kobelco Construction Machinery makes excavators and Kobelco Cranes makes crawler cranes, and the two businesses had previously historically been combined. However, Kobelco Cranes was spun-off into a separate company in April 2004, following the formation of Kobelco’s excavator alliance with CNH in October 2002.

That venture was dissolved at the end of 2012. Kobelco has since resumed marketing excavators under its own brand in North America, South America, Europe, the Middle East, the Commonwealth of Independent States (CIS) and Africa.

Commenting on the proposed re-integration of its two subsidiaries, a Kobe Steel statement said, “The Kobe Steel Group intends to enhance cooperation between the two companies to improve business efficiency, from development to procurement, and covering production, quality and sales. The group has previously been considering ways of further enhancing its global development capabilities in growth markets. At this time, the group has decided to earnestly begin considerations for a merger of the two construction equipment companies.

“Through the business merger, the combined excavator and crane businesses will benefit from more efficient operations that will further strengthen their business foundation. At the same time, the merger is anticipated to accelerate global development of the excavator and crane businesses, further contribute to spreading the Kobelco brand, and increase the enterprise value of the Kobe Steel group.”

In the fiscal year ended March 31, 2015, the two businesses had combined sales of JPY 382 billion (US$ 3.2 billion). Ordinary income jumped +43% compared to the previous year, to JPY 26.1 billion (US$ 219 million).

Kobelco was ranked the 13th largest maker of construction equipment in the world, in the 2014 edition of International Construction magazine’s Yellow Table industry league table.

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