(Adds company comments, market value, share price)
TOKYO, Oct 23 (Reuters) - Japan’s Hitachi Ltd is considering selling about half of its 50.8% stake in Hitachi Construction Machinery as part of its strategy to sell listed units with little synergy, the Nikkei business daily reported on Friday.
The sale would represent a final tranche of Hitachi’s decade-long business portfolio overhaul, in which it sold chip-making equipment manufacturer Hitachi Kokusai Electric and chemicals maker Hitachi Chemical in recent years.
State-backed fund Japan Investment Corporation (JIC) is among potential investors in Hitachi Construction, the Nikkei added.
Hitachi Construction, a smaller rival to Caterpillar Inc and Komatsu Ltd, has a market value of about $7 billion. It forecasts sales of 770 billion yen ($7.35 billion) for the year ending in March.
Shares of Hitachi Construction plunged more than 15% after the Nikkei report.
Hitachi plans to retain part of its stake to keep access to autonomous driving technologies for construction machinery, according to the Nikkei.
Hitachi said in a statement the company was weighing various options to boost its corporate value but that no decision had been made. A Hitachi Construction spokeswoman said the report was not something that the company has announced.
JIC said in a statement it was not true that the fund was considering investment in Hitachi Construction.
Hitachi has been among the most aggressive of Japan’s conglomerates in reorganising its business, selling non-core assets while buying foreign businesses to expand its digital footprint.
Reuters reported last month that Hitachi planned to launch a sale of another listed unit, Hitachi Metals Ltd, as early as this month in a deal that could be worth more than 700 billion yen ($6.6 billion).
The Japanese government has pointed out potential conflicts of interest between publicly traded parent companies and their listed subsidiaries and set corporate governance guidelines for those companies. ($1 = 104.7100 yen) (Reporting by Makiko Yamazaki, Chang-Ran Kim and Tetsushi Kajimoto; Editing by Chang-Ran Kim and Stephen Coates)
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