Nidec completes $1.2bn takeover of Emerson units
UPDATED: The Japanese motor manufacturer Nidec has completed its $1.2bn purchase of Emerson Electric’s motors, drives and power generation businesses – principally, the Welsh drives-maker Control Techniques and the French motor manufacturer, Leroy-Somer. Nidec predicts that the deal will accelerate its growth and help it to meet a mid-term goal of achieving two trillion yen ($17.6bn) in sales by the year ending March 2021.
Control Techniques will now be known as Nidec Control Techniques, while Leroy-Somer will become Nidec Leroy-Somer. The US-based Emerson Industrial Automation has been renamed Nidec Industrial Automation, while Kato Engineering will keep its existing name.
Some remaining acquisitions, including Leroy Somer Electro-Technique (Fuzhou), are due to be completed by the end of September, 2017.
Nidec says that it been developing a new growth platform focusing, in particular, on industrial and commercial businesses. The Emerson acquisitions will allow it to enhance and expand its operations to meet evolving customer demands.
The company adds that the acquired business have strong brands, solid business foundations, and good customer bases, especially in Europe and North America. It expects to accelerate their growth, pointing to synergies in terms of product and geographic fits. It will also be able to enhance its offering to customers by combining the acquired businesses’ drives with its own products.
Control Techniques’ president Scott Anderson, believes that the change of ownership is “a tremendous opportunity for us to join, work with and contribute to an industry-leading brand which believes in our products and will enable us to grow as businesses.”
“With such a dynamic and trustworthy company, we look towards the future with confidence,” adds Leroy-Somer president, Xavier Trenchant.
According to Emerson’s chairman and CEO David Farr, the transaction “marks another step in our strategic portfolio repositioning to align our businesses for long-term growth. With the sales of Leroy-Somer, Control Techniques and Network Power, we have further strengthened our balance sheet so we can continue to acquire valuable assets that enhance the ability of our global business platforms to serve our customers.”
Nidec’s founder and CEO, Shigenobu Nagamori, visited Control Techniques and Leroy-Somer on the two days after the deal completed to outline his vision for the future of the businesses.
“We have strong ambitions for both companies to grow,” he told the staff, “and Nidec is committed to providing the necessary support and investment to make that happen.
“Industries which require the use of electric motors, and therefore drives, will form the backbone of the world’s economy in the future,” he predicted. “Look at the expansion in the use of robots, electric vehicles and drones. All these items need motors, and all those motors need drives. There are clear opportunities for Control Techniques, Leroy-Somer and ultimately Nidec to prosper here.
“Our policy is to put the systems in place which will encourage growth,” Nagamori continued. “We will hire and train high-calibre people, and encourage those already working for the businesses to enhance their abilities.
“We will put great emphasis on research and development,” he added. “As an r&d engineer myself, I know that it is technology which will ensure our businesses succeed. Control Techniques, Leroy-Somer and Nidec offer each other great synergy, and working together we can improve and make our goals a reality.”
During his visit to Control Techniques' headquarters in Newtown, Nagamori met the Welsh First Minister, Carwyn Jones, to discuss the company’s future.
Together, Leroy-Somer (established in 1919) and Control Techniques (founded in 1973) employ about 9,500 people around the world. They had combined revenues of about $1.7bn in 2015.
Nidec, founded in 1973, manufactures electric motors and related components from small precision motors, to medium-voltage motors and generators. It employs around 140,000 people worldwide and has operations in more than 40 countries.
• In a separate announcement, Nidec has said that it plans to invest ¥100 billion ($878m) in robots and computers to eliminate overtime work for its 10,000 Japanese employees by 2020.