Hartford, Conn.—Mitsubishi Heavy Industries, Ltd. (MHI) has agreed to acquire Pratt & Whitney Power Systems, the small and medium-size gas turbine business unit of aerospace engine maker Pratt & Whitney (P&W).
Pratt & Whitney Power Systems (PWPS) sells aero-derivative engines for industrial applications and has approximately 430 employees. Italian firm Turboden s.r.l., a manufacturer of Organic Rankine Cycle (ORC) turbines and an affiliate company of PWPS, will also become an affiliate of MHI.
Owned by United Technologies Corp., parent company P&W accounted for US$13.4 billion in sales in 2011.
Terms of the agreement were not disclosed. The transaction is expected to close in the second quarter of 2013 and is subject to customary closing conditions, including regulatory approvals.
UTC said divesting Power Systems allows it to focus on core aerospace and commercial businesses.
MHI has begun consolidating and restructuring all operations into four business domains and to accelerate business development in an effort to boost its valuation to 5 trillion yen.
Indeed, it considers Energy & Environment to have the most potential, and MHI says its business plan calls for concentrated investment of management resources into this area to spur expansion rapidly. The acquisition of PWPS falls in line with this initiative.