Kobelco Construction Machinery and Kobelco Cranes to merge in Japan

Kobe Steel Ltd. and its wholly owned subsidiaries, Kobelco Construction Machinery Co. Ltd. and Kobelco Cranes Co. Ltd., reached a decision in late 2015 to merge the businesses of Kobelco Construction Machinery and Kobelco Cranes together.

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The merger, which will initially take place in Japan only, will see Kobelco Cranes absorbed by Kobelco Construction Machinery from April 1, 2016. The Kobe SteelGroup has decided to merge the two companies together as it considers it necessary to deliver three key benefits:

Improving business efficiency and effectively utilising management resources

From development to procurement, manufacturing, quality and sales, the organisation and business will be reviewed. Combining and rearranging common operations will increase business efficiency, while the effective utilisation of management resources will strengthen management.

Strengthening product development capabilities

The synergy from environmental technologies for fuel efficiency and low noise, basic technology for new materials, and other common elemental technologies will improve the technical level of the new company. New product development is anticipated from combining the technologies of excavators and cranes.

Bolstering global development and response capabilities

Sharing human resources at overseas locations, combining common operations and other measures will improve efficiency and further strengthen global development.

It will also enable Kobe Steel to pursue new possibilities from the synergy derived from the accumulated technologies of its excavators and cranes. The new company aims to take a new leap forward as a comprehensive construction machinerymanufacturer that combines the two product menus of excavators and cranes.

As the merger will take place between two wholly owned consolidated subsidiaries, Kobe Steel anticipates that it will have an insignificant impact on its consolidated results.

It is not yet known if and when a similar merger will take effect in Europe; considerations will continue with regard to the consolidation of domestic and overseas locations but, for the foreseeable future, Kobelco Construction Machinery Europe Ltd. And Kobelco Cranes Europe will retain their independence.