Nidec and Fuji Electric to Create Joint VentureOctober 2, 2008
The two companies have signed a memorandum of understanding to create a joint venture for industrial compact motors.
KYOTO, Japan, (GLOBE NEWSWIRE) -- Nidec Corp. (NYSE:NJ), together with Fuji Electric Holdings ("FHC") (Tokyo Stock Exchange First Section: 6504) and one of its subsidiaries, Fuji Electric Systems ("FES") (or "Parties"), announced that the Parties have agreed to a capital alliance arrangement with regards to the industrial compact motor business of Fuji Electric Motor ("FDM"), a subsidiary of FES, and FDM's three overseas subsidiaries ("FDM Group"). The parties have signed, on September 30, 2008, a non-binding memorandum of understanding ("MOU") wherein it was agreed that the ratio of capital contribution of Nidec and FES to the FDM Group shall be 60 percent and 40 percent, respectively. Consequently, FDM Group will cease to be a subsidiary of FHC and will become a new subsidiary of Nidec.
The Parties will continue to negotiate in good faith with a view to transferring all remaining shares of FDM held by FES to Nidec, while carefully considering the interests of all stakeholders as well as continuous growth of the joint venture.
Purpose and Background of the Capital Alliance
Nidec, as the world's leading manufacturer of various small and mid-sized brushless motors for IT, OA, and automotive applications, has been coordinating its business efforts to interactively manage internal and external growth to maximize corporate values and shareholder returns, especially through seeking advantages of scale by expanding in the small and mid-sized motor segments.
FHC Group, with a view to building public and industrial infrastructure on a global basis, bases its strength on its power electronics technology applied to various inverter and motor applications ("Drive Business"). The Drive Business is such that it is essential to maintain a competitive edge in all motor segments, from compact to large motors, to sustain growth.
Market conditions for industrial compact motors have become increasingly cost-competitive due to rising raw material costs and rapid commoditization. Under this environment, it was determined to be in the best interest of FHC Group and its Drive Business to seek to strengthen the industrial compact motor business of FDM.
A full copy of this press release in PDF format is available here.
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