Hitachi Zosen has unveiled plans to spin off its marine engine business and create a yet-to-be-named new company.

This new company will be involved in the manufacturing and after-sales services of marine engines.

Hitachi Zosen has also entered a basic agreement with Imabari Shipbuilding for the sale of a 35% interest in the new marine engine business.

The transaction will be carried out by a third-party allotment of shares from the new company.

Hitachi Zosen plans to keep a 65% stake in the new venture.

According to Hitachi Zosen, the new company and Imabari Shipbuilding plan to ‘hold the board of directors to approve the conclusion of the definitive agreement for this transaction at each company during December 2022 and seek to obtain approval’.

Hitachi Zosen and Imabari Shipbuilding believe that this deal will contribute to the stable supply and procurement of marine engines, as well as accelerate sales by strengthening the sales supply network.

The transaction is also expected to help improve profitability due to the funds received for development investment along with the opportunity to use the material procurement capabilities of Imabari Shipbuilding to reduce costs.

Hitachi Zosen started manufacturing marine engines in 1940. The company is the only licensee of MAN Energy Solutions and Winterthur Gas & Diesel in Japan.