Itochu To Acquire JAL's Human Resources Units

TOKYO (Nikkei)--Itochu Corp. will bring two personnel services subsidiaries of Japan Airlines Corp. under its umbrella by October, shifting into high gear the trading house's drive to strengthen its human resources business, The Nikkei learned Thursday.

The deal will also enable the struggling JAL to move ahead with planned withdrawals from noncore operations in its restructuring efforts closely monitored by the government.

Caplan Corp., a staffing firm 78%-owned by Itochu, will absorb JAL Business Co., which sends temporary workers to JAL group firms and other companies in the travel industry, and JAL Academy Co., a provider of employee-training services. Itochu will take a majority stake in the new company to be created through this three-way merger. JAL will keep its interest in the combined firm to around 30%, making an effective exit from the human resources business.

Since Caplan specializes in placing administrative personnel and JAL Business focuses on customer service and reception staff, Itochu believes that the merger will have a strong positive impact. The two JAL units have combined sales of 23 billion yen, so the merger will lift Caplan -- which raked in 12.7 billion yen in sales last fiscal year -- to 12th place or so from around 20th in the staffing industry. Itochu plans to continue acquiring subsidiaries of major corporations to make further inroads into the 6 trillion yen human resources business.

In exchange for a 100 billion yen syndicated loan partly guaranteed by the government, JAL is to restructure under state oversight. By giving up the two staffing units, the carrier will shed some 1,300 jobs.

(The Nikkei July 17 morning edition)