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NIDEC CORPORATION
Symbol U : NJDCY
Recent Sedar Documents

Nidec to Acquire OMRON Automotive Electronics Co. Ltd.

2019-04-16 02:05 ET - News Release

KYOTO, Japan, April 16, 2019 (GLOBE NEWSWIRE) -- Nidec Corporation (TSE: 6594; OTC US: NJDCY) (the “Company” or “Nidec”) announced today that its Board of Directors has approved a resolution to acquire OMRON Automotive Electronics Co. Ltd. (“OMRON Automotive Electronics”) from OMRON Corporation (“OMRON”) (the “Stock Acquisition”).  Accordingly, Nidec entered into a stock purchase agreement on April 16, 2019 (Japan time).

1. Purpose and background of the Stock Acquisition

Nidec positions its automotive motor business as one of the Company’s key strategic businesses, and is engaging in active efforts in the business for automotive motor market which is expected to grow rapidly in coming years.  Nidec is particularly focusing on module products with electric power steering (EPS) motors, electric brake motors, etc. and electronic control units (ECU) in accordance with the current trends towards electrification and autonomous driving in the automotive industry, as well as EV traction motor systems, etc. for which significant future market growth can be expected.   The Company anticipates that the electrification trend will accelerate further in response to the global environmental and energy related problems and will continue to engage in research and development with Elesys, an ECU manufacturer which joined Nidec group in 2014, to create more electrification products going forward.

OMRON Automotive Electronics engages in research and development, manufacturing, and sales of automotive electronics products as a subsidiary of OMRON Group, which has strengths in control equipment, systems, and electronic components based on its sensing and control technologies.  In particular, OMRON Automotive Electronics has produced many high-quality control products for body control system, ECUs for motor control systems, power control systems, and other areas to address the market’s electrification needs.  Through the Transaction (as defined under “2. Overview of OMRON Automotive Electronics”), the Company will be able to create new module and systems products by combining Nidec group’s motors, pumps, gears, etc. with OMRON Automotive Electronics’ products including ECUs and other electronics products.

Furthermore, Nidec Elesys and OMRON Automotive Electronics have a complementary relationship in the area of ADAS (Advanced Driver Assistance Systems), creating high expectations for significant synergies.  In particular, Nidec Elesys has strengths in wave radar and camera-related products, while OMRON Automotive Electronics has strengths in laser radar and driver monitoring systems, which will allow two companies to collectively provide a full spectrum of sensors required for autonomous driving in the future.  Following the Transaction, the Company expects that both companies will cooperate within the Nidec Group to provide a wide variety of sensor products which support autonomous driving technologies.

2. Overview of OMRON Automotive Electronics

(1)Company nameOMRON Automotive Electronics Co. Ltd.
(2)Headquarters6368, Nenjozaka, Okusa, Komaki, Aichi, Japan
(3)RepresentativeKatsuhiro Wada (President and CEO)
(4)Business descriptionManufacture and sale of automotive electronics components and systems
(5)CapitalJPY 5,000 million (as of September 30, 2018)
(6)Date establishedMay 6, 2010
(7)Major shareholders and ownershipOMRON Corporation (100%)
(8)Relationship with NidecCapitalNone
PersonnelNone
BusinessNone
(9)Three-year financial summary (JPY in millions)
Fiscal year endMarch 2016March 2017March 2018 
Net assets25,17624,06726,480 
Total assets38,92137,31440,357 
Net assets per share (JPY in thousands)252241265 
Net sales39,208  36,72736,327 
Ordinary income2,8346851,092 
Net income5527693,610 
Net income per share (JPY in thousands)6836 
(Reference)Three-year financial summary of OMRON Automotive Electronic Components Business (JPY in millions) 
Fiscal year endMarch 2016March 2017March 2018 
Net sales140,546132,562133,186 
Segment income7,3427,1275,816 
Total assets76,42181,02489,048 

Through the Stock Acquisition, Nidec will acquire OMRON Automotive Electronics’ subsidiaries.  At the same time of the Stock Acquisition, Nidec and its subsidiaries will acquire OMRON’s subsidiaries, OMRON AUTOMOTIVE ELECTRONICS de Mexico, S. de R.L. de C.V. (“OAX”) and OMRON COMPONENTES AUTOMOTIVOS LTDA. (“Target Foreign Subsidiaries”), and automotive electronic components business of OMRON VIETNAM CO., LTD., PT. OMRON MANUFACTURING OF INDONESIA and OMRON HONG KONG LTD. (“Target Overseas Businesses”). The Stock Acquisition, acquisition of Target Foreign Subsidiaries and acquisition of Target Overseas Businesses are collectively defined as the “Transaction”.

(Reference) Overview of OAX: The Company describes the overview of OAX since OAX’s net sales are larger than those of other OMRON Automotive Electronics’ subsidiaries.

(1)Company nameOMRON AUTOMOTIVE ELECTRONICS de Mexico, S. de R.L. de C.V.
(2)HeadquartersAv. Paraiso No.344 Parque Industrial y de Negocios Las Colinas Silao, Guanajuato C.P. 36270 Mexico
(3)RepresentativeRandy Wara (President and CEO)
(4)Business descriptionManufacture of automotive electronic components and systems
(5)CapitalMXN 1,115 million
(6)Date establishedFebruary 25, 2008
(7)Major investors and capital contribution ratioOMRON Mexico, S.A. de C.V. (99%)
OMRON Automotive Electronics Co. Ltd. (1%)
(8)Relationship with NidecCapitalNone
PersonnelNone
BusinessNone
(9)Three-year financial summary (MXN in millions)
Fiscal year endDecember 2015December 2016December 2017 
Net assets219688 1,166 
Total assets4031,649 1,798 
Net sales4882,959 3,767 
Ordinary income1810  130 
Net income14(50)119 

3. Overview of OMRON

(1)Company nameOMRON Corporation
(2)HeadquartersShiokoji Horikawa Higashi-iru, Shimogyo-ku, Kyoto, Japan
(3)RepresentativeYoshihito Yamada (President and CEO)
(4)Business descriptionResearch and development, manufacture and sale of control equipment, FA system, electronic components and healthcare products
(5)CapitalJPY 64,100 million (as of December 31, 2018)
(6)Date establishedMay 19, 1948
(7)Consolidated total equityJPY 515,837 million (as of December 31, 2018)
(8)Consolidated total assetsJPY 732,983 million (as of December 31, 2018)
(9)Major shareholders and ownership
(as of September 30, 2018)
Japan Trustee Services Bank, Ltd. (trust account) (5.85%)
The Master Trust Bank of Japan, Ltd. (trust account) (4.44%)
STATE STREET BANK AND TRUST COMPANY 505223 (3.37%)
The Bank of Kyoto, Ltd. (3.37%)
MUFG Bank, Ltd. (2.45%)
Japan Trustee Services Bank, Ltd. (trust account 5) (1.98%)
JP MORGAN CHASE BANK 385151 (1.95%)
MOXLEY AND CO LLC (1.95%)
JP MORGAN CHASE BANK 385632 (1.83%)
Japan Trustee Services Bank, Ltd. (trust account 7) (1.80%)
(10)Relationship with NidecCapitalNone
PersonnelNone
BusinessNone
Related party
relationship
None

4. Number of shares to be acquired, acquisition price, and shares held before and after the acquisition

Under the stock purchase agreement, Nidec will acquire all shares of OMRON Automotive Electronics (number of shares held after the acquisition: 100,000, number of voting rights: 100,000, ownership: 100%), and all shares of Target Foreign Subsidiaries including all equities of OAX owned directly and indirectly by OMRON and OMRON Automotive Electronics.

Acquisition price (total consideration of the Transaction including the consideration for Stock Acquisition, acquisition of Target Foreign Subsidiaries and acquisition of Target Overseas Businesses) is expected to be JPY 100 billion (1).

Note: (1) The acquisition price would be finalized subject to the condition described in the stock purchase agreement including the financials.

5. Schedule

(1)Board of Directors resolutionApril 16, 2019 (Japan time)
(2)Contract signedApril 16, 2019 (Japan time)
(3)ClosingExpected around the end of October 2019 (The Transaction may be deferred with the status  of   approval of antitrust authorities)

6. Future Outlook

Nidec intends to make appropriate disclosures regarding the impact of the Transaction described herein on its consolidated financial performance for the current fiscal year and announce any changes to its financial performance in accordance with the applicable rules of the Tokyo Stock Exchange once such details are determined.

Cautionary Statement Concerning Forward-Looking Information

This press release contains forward-looking statements regarding the intent, belief, strategy, plans or expectations of the Nidec Group or other parties. Such forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors, including, but not limited to, the risks to successfully integrating the acquired business with the Nidec Group, the anticipated benefits of the planned transaction not being realized, changes in general economic conditions, shifts in technology or user preferences for particular technologies, whether and when required regulatory approvals are obtained, other risks relating to the successful consummation of the planned transaction, and changes in business and regulatory environments. The Nidec Group does not undertake any obligation to update the forward-looking statements contained herein or the reasons why actual results could differ from those projected in the forward-looking statements except as may be required by law.

Contact:
Masahiro Nagayasu
General Manager
Investor Relations
+81-75-935-6140
ir@nidec.com 

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