Hitachi Ltd. and Mitsubishi Heavy Industries Ltd. said Thursday they have agreed to integrate their commercial-use air conditioning and refrigeration equipment businesses on April 1.

The joint venture would be the second-largest Japanese air conditioner maker after Daikin Industries Ltd.

Hitachi's wholly owned subsidiary, Hitachi Air Conditioning Systems Co., and MHI's air conditioning and refrigeration equipment division will be merged into a company owned equally by Hitachi and MHI, the parties said.

The joint venture, which is expected to have annual sales of about 270 billion yen, would employ about 9,200 workers.

Osaka-based Daikin Industries recorded group sales of 625.7 billion yen for the year to March 31.

An MHI executive will become chairman of the new company and a Hitachi official will assume the presidency, the two companies said.

Hitachi President Etsuhiko Shoyama said the merger will "enable the two companies to expand sales by making the most of each other's networks."

MHI President Kazuo Tsukuda said he expects the business integration to "create huge synergy effects."

The new firm will take over MHI's Beaver brand air conditioners for household use. The deal does not cover the Hitachi group's air conditioners for family use and MHI's car air conditioners, they said.

An MHI official said the two companies want to retain their domestic production bases in such prefectures as Aichi, Hyogo, Ibaraki and Shizuoka if possible.

Hitachi and MHI said integration is essential for growth and is a response to changing business needs both in Japan and abroad, including growing demand for environmentally friendly air conditioners.

The two companies also intend to step up their global operations, especially in China, where demand for business-use air conditioners is expected to grow.