Hon Hai agreed to take half of Mitsubishi Electric's automotive unit for 115 billion yen

Mitsubishi Electric said on October 16 that it had signed a share transfer agreement handing 50 percent of Mitsubishi Electric Mobility, the company holding its automotive equipment business, to Lin Yin International Investment, an investment management subsidiary of Hon Hai Precision Industry. The transfer price is expected to be 115 billion yen, against an agreed enterprise value of 320 billion yen for the business and an equity value of 230 billion yen. Mitsubishi Electric disclosed the transaction to the Tokyo Stock Exchange the same day.

They said the alliance would combine Mitsubishi Electric Mobility’s capabilities, “particularly in electric powertrains, software and vehicle control,” with Hon Hai’s speed and scale in market deployment. A joint presentation listed on the exchange on October 19 put the unit’s standalone revenue at 657.6 billion yen for the year to March 2026, against 875.6 billion yen for the automotive equipment business on a consolidated basis, and its headcount at about 6,400. The presentation credited the unit with more than 50 years of control-software development and cumulative production of more than 120 million vehicle control products, and named electric powertrain, automated driving and in-vehicle intelligence as the alliance’s three domains.

The deal is structured as a simplified absorption-type company split under Article 784, Paragraph 2 of the Companies Act, so it proceeds without a shareholder vote at Mitsubishi Electric. The split takes effect and the share transfer closes in October 2027, subject to competition approvals in Japan and overseas. Mitsubishi Electric expects to record an impairment loss of approximately 100 billion yen for the year ending March 2027, and the unit becomes an equity-method affiliate from the third quarter of the year after that. A memorandum of understanding was signed on April 24.