Hitachi Transport System, Ltd. (“HTS”) hereby announces that it has adopted a resolution to form a capital and business alliance (the “Capital and Business Alliance”) with AIT Corporation (“AIT”) and has today concluded a capital and business alliance agreement (the “Capital and Business Alliance Agreement”).
The Capital and Business Alliance Agreement will be conducted on condition that the share exchange between AIT and Nisshin Transportation Co., Ltd. (“Nisshin Transportation”), which is a subsidiary of HTS, is approved by the extraordinary general meeting of shareholders of AIT scheduled to be held on December 21, 2018, and that approval or the like is granted by the relevant authorities, including the Japan Fair Trade Commission.
1. Purpose of and Reason for the Capital and Business Alliance
Founded in 1950 as a logistics subsidiary handling transport operations for Hitachi, Ltd., HTS has broadened its operations through bulk contracting for in-factory and shipping work and transport of ultra-heavy goods in Japan and abroad. Moreover, HTS started building a logistics information system at an early stage, using enhanced services to provide comprehensive logistics services to companies (3PL), and expanded its business with customers outside of the Hitachi Group. Today, HTS—with the aim of becoming the most preferred solution provider for all of our stakeholders—has been promoting measures to realize new innovation under our new business concept “LOGISTEED” in order to expand the collaborative creation field beyond business and industry, with the “enhancement of logistics as a function” being its core.
AIT engages in international freight forwarding business, consisting of international freight forwarding and import/export custom clearance and so on incidental thereto, and 3PL services (management and operation of logistics). Since its incorporation, AIT has focused on and established its bases particularly in the coastal areas of China, and has provided thorough support for the AIT Group’s freight in China and freight information to customers promptly. Moreover, as a company which is acquired a license as an Authorized Customs Broker for the AEO Program and guaranteed its security and compliance, AIT is aiming to provide highly convenient and higher-quality services in international freight forwarding services.
Under these circumstances, based on the shared understanding that it is necessary to further strengthen the business foundation and thereby grow into one of the most competitive logistics companies in and outside Japan, AIT and HTS have reached an agreement on the Capital and Business Alliance, aiming to strengthen the relationship between both companies so that they can expeditiously provide services based on a higher-level alliance between international freight forwarding and 3PL services achieved by mutually utilizing their respective networks and know-how, etc., in line with customers’ evolving needs, and to contribute to maximizing their corporate value and fulfillment of their social mission.
2. Particulars of the Capital and Business Alliance
(1) Particulars of the Business Alliance
Both companies plan to carry out a business alliance involving the following particulars. Concrete policies and details will be discussed continuously.
Efforts of HTS and AIT:
(i) to realize comprehensive logistics services through a seamless alliance between 3PL services and international freight forwarding;
(ii) to reinforce the revenue base by establishing platforms for apparel and FMCG logistics;
(iii) to reinforce the sales strengths through collaboration in non-apparel and non-FMCG business; and
(iv) to reinforce efforts toward advanced logistics utilizing LT* and IT. *Abbreviation of Logistics Technology.
(2) Particulars of the Capital Alliance
Both companies decided to conduct a share exchange wherein AIT will be a wholly-owning parent company and Nisshin Transportation will be a wholly owned subsidiary (the “Share Exchange”), and a share exchange agreement has been concluded between AIT and Nisshin Transportation today.
Through the Share Exchange, HTS will hold approximately 20% of the total number of AIT’s issued shares (4,800,000 shares), and become a major shareholder and an affiliated company of AIT. During the term of the Capital and Business Alliance Agreement, HTS must not transfer to a third party, create security over, or otherwise dispose of, AIT shares to be held by HTS, except where AIT gives its prior consent.
