Japan's Nidec to buy Emerson Electric's motors, drives unit for $1.2 bn
02 August 2016
Nidec Corp, a Japanese manufacturer of electric motors, today struck a deal to buy Emerson Electric Co's motors and drives unit for $1.2 billion in cash.
Included in the sale are two Emerson Motor Company businesses – Emerson's Commercial and Industrial Motors and Emerson Appliance Motors and Controls.
Combined, these businesses generated more than $800 million in sales in fiscal 2009.
Emerson will continue to operate its hermetic motors business, which serves Emerson Climate Technologies' Copeland Scroll compressors, and also will continue to operate the large motor business based in Europe (Leroy-Somer) as well as Emerson Air Comfort Products in the US, which makes the popular Emerson Ceiling Fan.
Nidec said it intends to retain existing facilities and current management and employees, and operate these businesses from a headquarters building on the Emerson campus that currently is home to the Motor Technology Center.
St Louis, Missouri-based Emerson had last year said that it plans to spin off its network power division and explore options for other operations, including motors and drives, in order to focus on more profitable units.
Its motors and drives unit has recently seen a cyclical decline in sales due to a significant drop in oil prices and weak macro-economic conditions, but Nidec expects the business to grow as the cycle recovers and as synergies are realized in the mid-to long-term perspective.
Emerson's motors unit is a leading industrial motor manufacturer for large and small residential and commercial markets in applications ranging from water treatment, mining, oil and gas and power generation to air conditioning condensers, rooftop cooling towers and commercial refrigeration.
Emerson Appliance Motors and Controls is the largest supplier of appliance motors in the US, and its motors, motor controls, timers and machine controls are in clothes washers and dryers, dishwashers and refrigerators made by the leading manufacturers. It also makes motors, controls and switches for automotive and commercial markets.
The businesses employ about 6,000 people and the manufacturing facilities and technology centers for both businesses are located in the US, Mexico, China, India, and the UK.
Nidec, based in Kyoto, is about an $8 billion precision manufacturer of small and medium-size motors and fans for IT/consumer electronics, automobiles, home appliances, and industrial applications.
The company also manufactures electronic/optical components and machinery.