Japan’s Nidec agrees to pay $1.2b for Emerson drives, power

Emerson Electric Company Canadian headquarters is shown in Markham February 7, 2012. REUTERS/Mike Cassese

Nidec Corp. agreed to pay $1.2 billion for the motors, drives and electric power generation business of Emerson Electric Co., adding customers in Europe and North America. The purchase is the Japan-based precision motor-maker’s largest.

The all-cash deal includes France-based Leroy Somer Holding and businesses based in the U.K., U.S., China and India, Nidec said Tuesday in a statement. Nidec purchased other divisions of St. Louis-based Emerson in 2010.

Nidec, led by 71 year-old billionaire Chairman Shigenobu Nagamori, has announced deals worth about $2.9 billion since 2000 to add more than 40 companies and form the world’s biggest maker of precision motors for hard-disk drives. Bringing on the Emerson businesses will help Nidec reach its mid-term target of 2 trillion yen ($20 billion) in sales, compared with the 1.178 trillion yen it booked for the year ended March, the Kyoto, Japan-based company said in the statement.

“This fits in with his diversification plans,” said Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo, referring to Nagamori. “He thinks electric motors have a great future and are going to be used for more and more things. It’s going to be a growth business.”

For an in-depth look at Nagamori’s management style, click here.

Nidec’s two biggest customers are Seagate Technology Plc and Western Digital Corp., which make hard drives used in personal computers and other devices, according to data compiled by Bloomberg. That has prompted the company to look to broaden its product range as growth shifts away from disc drives to solid-state storage modules for top-selling computer tablets and smartphones.

Nagamori last year said he could envision buying a company with sales of as much as 1 trillion yen to help raise Nidec’s revenue to 10 trillion yen. The Emerson deal announced Tuesday is more than triple the size of its next-largest, the $337 million acquisition of pump-maker Geraete- und Pumpenbau GmbH Dr Eugen Schmidt completed last year.

Nidec’s 2010 acquisition included Emerson’s commercial and industrial motors as well as its appliance motors and controls, while excluding Leroy-Somer, the large motor business based in Europe.

Emerson Chief Executive Officer David Farr in June 2015 announced plans to spin off the company’s network power division and explore options for other operations, including motors and drives, to focus on more profitable units.

Also read:

CD&R, two Chinese firms likely bidders for Emerson unit in deal worth $1b

Emerson unveils $35m high-tech facility in PH

Bloomberg

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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