Hitachi to Transfer Shares in Hitachi Procurement Service to Infosys, Panasonic, and PASONA

Tokyo, Dec 14, 2018 --- Hitachi, Ltd. (TSE:6501, Hitachi ), Infosys Ltd. (NYSE:INFY, Infosys ), Panasonic Corporation (TSE:6752, Panasonic ), and Pasona Group Inc. (TSE:2168 PASONA ), today announced that a contract was signed on Dec 14, 2018.

The contract is in relation to the transfer of part of the shares owned by Hitachi in Hitachi Procurement Service Co., Ltd. ( Hitachi Procurement Service ), Hitachi's fully owned subsidiary that handles indirect materials*1 purchasing functions for the Hitachi Group, to Infosys, Panasonic, and Pasona Group's subsidiary PASONA Inc.

The transfer of shares is scheduled to take place on April 1, 2019.

*1 Indirect materials: materials used in a production process, but which can't be linked to a specific product or job.

Recently, as a result of advancements in digitalization, digital technologies such as artificial intelligence (AI) and robotic process automation (RPA) are being applied in conventional tasks, and there has been a growing trend toward streamlining and increasing efficiency in work processes, while at the same time strengthening corporate competitiveness. This is true of corporate procurement operations as well, where companies are facing an urgent need to apply digital technologies in order to achieve efficient procurement activities that demonstrate high added value, and to contribute to further enhancing their competitive strength. The trend toward business process management (BPM) and Business Process Outsourcing (BPO) is also accelerating, for example in corporate procurement and accounting processes, and the related service market in Japan is expected to expand even further in the future.

In this backdrop, Hitachi, Infosys, Panasonic, and PASONA agreed to form a new company in order to combine their strengths and expertise, and to further strengthen the procurement function of indirect materials. Hitachi will transfer part of the shares in Hitachi Procurement Service to Infosys, Panasonic and PASONA, and the shareholder composition after the transfer will be as follows: Infosys: 81%; Hitachi: 15%; Panasonic: 2%; and PASONA: 2%. After the transfer is complete, the new company name will be HIPUS, Ltd. ( HIPUS ). HIPUS will combine Infosys's expertise in procurement on a global scale, BPM platforms, and advanced IT technologies with PASONA's human capital and BPO networks in Japan. Initially, it will strive to increase efficiency and added value through merits of scale, by applying BPO services in Hitachi's and Panasonic's procurement activities.

Furthermore, HIPUS will utilize Hitachi's, Infosys's and PASONA's respective customer bases to introduce BPM and BPO services in processes such as procurement and purchasing operations, and will roll out a broad range of other businesses as well, for example by introducing consulting, reverse auctions*2, and other purchasing schemes, and by providing training services related to procurement. In this way, it will aim to achieve transaction volumes on a scale of 400 billion yen*3 in FY2021.

*2 Reverse auction: a type of auction in which sellers bid for the prices at which they are willing to sell their goods and services.

*3 Hitachi Procurement Service's transaction volumes during the year ended March 2018 totaled 103.0 billion yen.

Outline of the share transfer contract

Outline

Of the regular shares in Hitachi Procurement Service. owned by Hitachi, 81% will be transferred to Infosys, 2% to Panasonic, and 2% to PASONA.

Date of signing of the share transfer contract

Dec 14, 2018

Date of share transfer execution

April 1, 2019 (tentative)

Outline of the companies

New company

Corporate name

HIPUS, Ltd.

Representative

TBD

Head Office

2-2-1 Otemachi, Chiyoda-ku, Tokyo 100-8228, Japan

Establish

April 1, 2019 (The date when the corporate name will be changed from Hitachi Procurement Service.)

Outline of business

BPM and BPO services in processes such as procurement and purchasing operations, etc.

End of accounting period

March 31

Number of employees

210

Capital

JPY 500million

Shareholders

Infosys, Hitachi, Panasonic and PASONA

Hitachi, Ltd.

Corporate name

Hitachi, Ltd.

Representative

President & CEO, Toshiaki Higashihara

Head Office

6-6 Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan

Established

February 1, 1920

Outline of business

Development, manufacture and sales of products and provision of service across eight segments: Information & Telecommunication Systems, Social Infrastructure & Industrial Systems, Electronic Systems & Equipment, Construction Machinery, High Functional Materials & Components, Automotive Systems, Smart Life & Ecofriendly Systems, Other

End of accounting period

March 31

Sales

JPY 9,368.6 billion

Number of employees

307,275 (as of March 31, 2018)

Hitachi Procurement Service Co., Ltd.

Corporate name

Hitachi Procurement Service Co., Ltd.

Representative

President, Shinichiro Nagagata

Head Office

2-2-1 Otemachi, Chiyoda-ku, Tokyo, Japan

Established

June 4, 2002

Outline of business

Procurement solution services

(Commissioned procurement business, centralized purchasing of indirect materials through internet, export & import, procurement consulting, BPO services, and information tools for procurement)

End of accounting period

March 31

Number of employees

210 (as of March 31, 2018)

Infosys, Ltd.

Corporate name

Infosys Limited

Representative

CEO & MD, Salil Parekh

Head Office

Bengaluru, India

Established

1981

Outline of business

Next-generation digital services and consulting

End of accounting period

March 31

Sales

US$10.93 billion(March 31, 2018).

Number of employees

217,700+ employees

Panasonic Corporation

Corporate name

Panasonic Corporation

Representative

President, Kazuhiro Tsuga

Head Office

1006, Oaza Kadoma, Kadoma-shi, Osaka, Japan

Established

D

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