Mitsubishi Heavy Industries Ltd (MHI) and Nippon Yusoki Co Ltd (Nichiyu) have signed an agreement to integrate the two companies' forklift businesses.

MHI is an established engine-powered forklift maker with global operations, while Nichiyu focuses on battery-powered forklifts and operates mainly in the domestic and Asian markets.

The merger is expected to result in an enhanced product line-up, the sharing and optimisation of distribution channels, and increased efficiency in product development, human resource utilisation and capital investment.

The two companies aim to pool their global management resources, enabling the new integrated entity, whose name is yet to be announced, to succeed as a top-tier manufacturer in the rapidly changing global forklift market.

Over the years, MHI and Nichiyu have strengthened their corporate ties. In June 2007, MHI became Nichiyu's largest shareholder by acquiring all of the shares offered under a third-party allocation initiative (Forkliftaction.com News #313).

In April 2009, the two companies merged their Japanese sales operations and jointly established a new company named Nichiyu MHI Forklift Co Ltd, which will be part of the integration.

In the latest integration development, MHI's forklift operations will be spun off and integrated into Nichiyu. As a result, Nichiyu will become an MHI consolidated subsidiary, but the company, which has maintained solid growth to date, will continue to operate independently and focus on achieving further business expansion under the new configuration.

In return, Nichiyu will provide MHI with an allotment of its common shares (representing 49.4% of the voting stock of Nichiyu) as well as classified stock without voting rights (in total, MHI will own 64.75% of shares).

Both companies are currently discussing the merger details and aim to sign a definitive agreement in February 2013, and anticipate the merger to take effect from 1 April 2013.

MHI, headquartered in Minato-ku, Tokyo, has been active in overseas markets for many years, and has business operations in the US, the Netherlands, Finland, Singapore and China. Besides marketing under the Mitsubishi Forklift Trucks brand, MHI produces and markets forklifts under the Cat Lift Trucks brand. It also acquired Finnish warehouse equipment manufacturer Rocla Oyj in 2008 (Forkliftaction.com News #384), and is collaborating with Jungheinrich AG in the North American market. The company is currently adapting its Dalian, China facilities as a base for producing forklifts targeted at emerging economies.

Nichiyu, headquartered in Nagaokakyo City, Kyoto Prefecture, was the first Japanese manufacturer to develop battery-powered forklifts. Its core operations today focus on small- and medium-sized forklifts, materials handling systems and other products for the Japanese and Asian markets. Nichiyu is preparing to launch its second production base in Thailand in April 2013, following the earlier launch of its production base in Shanghai.