TOKYO — Mitsubishi Electric Corp. has entered into an agreement to purchase from De’Longhi Industrial S.A. shares representing approximately 74.97 percent of the share capital of DeLclima S.p.A., an Italian company in the commercial air conditioning products business. After the closing of this transaction, a mandatory tender offer will be launched by Mitsubishi Electric in order to acquire the remaining shares representing approximately 25.03 percent of the share capital of DeLclima, in compliance with Italian financial law and CONSOB regulations. The total expected purchase price for 100 percent of DeLclima’s shares is approximately €664 million, calculated based on a per-share price of €4.44.

The completion of the transaction by Mitsubishi Electric to acquire 74.97 percent of DeLclima’s share capital requires clearance from antitrust authorities and the completion of the sale of DL Radiators S.r.l., an indirect subsidiary of DeLclima. DL Radiators will be sold to a company affiliated with De’Longhi Industrial prior to the closing of the transaction. In addition, under the agreement the €4.44 per-share price will be increased by an additional amount to be calculated on a daily basis, starting from June 30, 2015 up to the closing date. The estimated per-share amount of such price increase is approximately €0.07, assuming that the closing of the transaction will take place at the end of November 2015.

Mitsubishi Electric has a global presence in the HVAC market in Japan, Europe, North America, China, Southeast Asia, India, and Australia, and the company said Europe in particular is an important market for Mitsubishi Electric after Japan. As the European air conditioning market matures, it requires market players both to provide value-added products such as energy-saving products and to comply with environmental regulations, such as F-gas regulations, and in response, Mitsubishi Electric has grown its business in the region with a particular focus on room and packaged air conditioning as well as multi air conditioning for buildings. The acquisition of DeLclima represents Mitsubishi Electric’s full-scale entry into the chillers business and will enable the company to expand its business portfolio, which will be important in achieving growth and increasing market presence. Moreover, the acquisition will allow Mitsubishi Electric to more adequately respond to F-gas regulations, which are expected to become even more important in the coming years.

DeLclima’s subsidiaries include Climaveneta S.p.A. and RC Group S.p.A. Climaveneta has a strong brand in the chillers business. RC Group has expertise in specialized air conditioning, such as air conditioning for server rooms.

Demand for chillers is expected to remain strong in Europe, which is of high strategic importance for Mitsubishi Electric’s HVAC business. The company said acquiring DeLclima will allow it to enhance its product lineup and become a comprehensive provider of HVAC systems from residential to commercial.

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Publication date: 8/27/2015

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