Notice Concerning Succession of Aero Engines Business for the Ministry of Defense from MHI’s Group Company to MHI

Mitsubishi Heavy Industries, Ltd.

TOKYO, Oct 23, 2024 – Mitsubishi Heavy Industries, Ltd. (hereinafter “MHI”) announced today that MHI has decided to succeed the aero engines business for the Ministry of Defense from Mitsubishi Heavy Industries Aero Engines, Ltd. (hereinafter “MHIAEL”), a group company of MHI, through an absorption-type company split.

  1. Purpose of the company split
    MHIAEL's aircraft engine business for the Ministry of Defense will be transferred to Integrated Defense & Space Systems of MHI to respond to the expansion of our commercial aircraft engine business, which has been influenced by increasing global air passenger demand, and to the growing scale of our defense aircraft and missile systems business. The allocation of resources between the two businesses will be revised to establish an optimal business operations structure.
  2. Overview of the company split

    (1)Business of succession to MHI
    Design, manufacture, procurement, sales and after-sales servicing of aero engines for the Ministry of Defense.

    (2)Schedule

    Decision on absorption-type company split October 23, 2024
    Date of conclusion of the agreement January 2025 (tentative)
    Effective date of company split April 1, 2025 (tentative)

    Note : Since MHI is expected to implement a simplified absorption-type split, as set forth in Article 796, Paragraph 2 of the Companies Act of Japan, and MHIAEL is expected to implement a short-form absorption-type split as set forth in Article 784, Paragraph 1 of the same act, shareholder approval will not be required by either company.

    (3)Method of the company split
    This will be a simplified absorption-type company split, with MHI as the successor company and MHIAEL as the splitting company.

    (4) Details of allotment related to the company split
    MHI owns all shares of MHIAEL, the splitting company, and no money or other assets will be re-allocated upon this company split.

    (5) Others
    Further details will be announced as soon as they are determined.

  3. Profile of the parties of the company split
    Splitting company Successor company
    Company name Mitsubishi Heavy Industries Aero Engines, Ltd. Mitsubishi Heavy Industries, Ltd.
    Head office 1200 Higashi-Tanaka, Komaki city, Aichi 3-2-3 Marunouchi, Chiyoda-ku, Tokyo
    Representative Masaki Ushida
    President & CEO    		 Seiji Izumisawa
    President & CEO
    Summary of business
    • Design, manufacture, repair of aircraft engines, parts, components, and related machinery, and sales of parts and components
    • Design, manufacture, repair of gas turbines for power generation and mechanical drive, and related machinery, and sales of parts and components
    • All business operations relating to the preceding items
    		 Major products and operations: Energy Systems, Plants & Infrastructure Systems, Logistics, Thermal & Drive Systems, Aircraft, Defense & Space
    Established July 1, 2014 January 11, 1950
    Paid-in capital 6,000 million yen 265,608 million yen
    Shares issued
    (as of September 30, 2024)    		 1,400 shares 3,373,647,810 shares
    Book closing date March 31 March 31
    Major shareholders and shareholding ratio
    (as of September 30, 2024)    		 Mitsubishi Heavy Industries, Ltd. 100% The Master Trust Bank of Japan, Ltd. (Trust Account) 15.0%
    Custody Bank of Japan, Ltd.(Trust Account) 5.6%
    Meiji Yasuda Life Insurance Company 2.4%
    STATE STREET BANK WEST CLIENT – TREATY 505234 1.9%
    SSBTC CLIENT OMNIBUS ACCOUNT 1.8%
    Operating results for the most recent business year and financial positions
    as of the end of the business year (as of March 31, 2024)
    Net assets 35,233 million yen 1,162,795 million yen
    Assets 273,287 million yen 3,480,317 million yen
    Net assets per share 25.23 million yen 345.85 yen
    Sales 137,264 million yen 1,729,653 million yen
    Operating income (loss) (4,813) million yen 73,578 million yen
    Ordinary income 1,906 million yen 120,278 million yen
    Net income 2,582 million yen 153,071 million yen
    Net income per share 2.58 million yen 45.55 yen

    Note: On April 1, 2024, MHI executed a ten-for-one stock split of its common shares. Net assets per share and net income per share are shown retroactively adjusted as though that the stock split was conducted at the beginning of FY2023.

  4. Outlook
    The impact of the company split on the business results and forecasts of MHI (both non-consolidated and consolidated) are expected to be negligible.