Nidec Completes the Acquisition of the Shares of Italian Machine Tool Manufacturer PAMA and Its Affiliates

Rhea-AI Summary

Nidec Corporation has successfully completed the acquisition of PAMA S.p.A, an Italian machine tool manufacturer, as of February 1, 2023. PAMA becomes a wholly owned subsidiary, aiming to enhance Nidec's machine tool business strategy. PAMA, founded in 1926 and headquartered in Rovereto, Italy, holds a significant market share in boring and milling machines. The combined annual sales of Nidec's machine tool companies are approximately 87 billion yen, with ambitious targets of over 260 billion yen by 2025 and 500 billion yen by 2030. The acquisition is not expected to materially impact Nidec's financial performance for the current fiscal year.

Positive

• PAMA's strong market position in boring and milling machines should provide Nidec with increased sales opportunities.
• Expected synergies in sales and product development could enhance Nidec's competitiveness in international markets.
• Nidec aims for combined annual sales exceeding 260 billion yen by 2025, indicating potential for substantial growth.

Negative

• The integration of PAMA into Nidec's operations poses potential challenges that may impact future performance.
• The acquisition may not significantly boost Nidec's financial results for the current fiscal year, indicating a cautious short-term outlook.

KYOTO, Japan--(BUSINESS WIRE)-- Nidec Corporation (TOKYO:6594; OTC US:NJDCY) (the “Company” or “Nidec”) announced today that, in accordance with its November 30, 2022 press release, “Nidec to Execute a Share Transfer Agreement on Italian Machine Tool Manufacturer PAMA and Its Affiliates,” it has completed the acquisition of all the shares of PAMA S.p.A (“PAMA”) on February 1, 2023.

Accordingly, PAMA will become a wholly owned subsidiary of the Company as outlined below together with Nidec’s business strategy going forward.

1. Outline of the New Subsidiary

(1)	Company name	PAMA S.p.A.
(2)	Head quarter	The city of Rovereto, Trentino-Alto Adige, Italy
(3)	Foundation	1926
(4)	New management	Director & Chairperson: Tatsuya Nishimoto (Newly appointed) Director & General Manager: Alessandro Batisti (Reelected) Director: Takeshi Motohashi (Newly elected)
(5)	Business bases	Manufacturing and sales bases: Italy and China Sales bases: The US, Germany, India, and others
(6)	Affiliates	Nine companies in China, the US, Germany, India, and others
(7)	Principal businesses	Manufacturing and sale of machine tools (boring and milling machines and machining centers, among others)
(8)	Number of employees	Approximately 430
(9)	Sales	Forecast as of the end of the fiscal year ended December 31, 2022		135.6 million euro (approximately 19.12 billion yen)

2. PAMA’s Strengths

A company, PAMA, with a broad product portfolio and high technological capabilities in the fields of 5-face milling machine, boring and milling machines, and large machine tools, boasts the world’s largest market share as a boring and milling machine manufacturer, whose end users include major press machine, construction equipment, heavy machine for energy, earthmoving machine, shipbuilding and aerospace aircraft manufacturers. In addition, PAMA enjoys stable annual sales in Europe, North America, and China – the country where PAMA has been in business since 1988.

3. Creating Synergies with the Nidec Group

Nidec Machine Tool Corporation and Nidec OKK Corporation, two Nidec Group companies whose main products are gear cutting machines, large machine tools and machining centers, have been in need of further developing the multitasking and 5-axis machining technology as well as expanding its lineup of boring and milling machines in the large machine tools space. Also, both companies’ main sales area has been in Japan and, compared with other major Japanese machine tool manufacturers, the two companies have generated less sales from overseas markets such as European and American markets and Chinese market, where the future growth is expected.
PAMA’s joining the Nidec Group will enable the Company to pursue synergies in all the areas of sale, manufacturing, and product development, including:
(1) expanding sales in the Asian, European and American markets based on a wide range of product lineup and cross selling;
(2) developing new products and components by combining the three companies’ technological expertise; and
(3) reducing lead time for delivery and manufacturing cost based on a global production optimization in Europe, the US, and Asia.

4. What Nidec Aims to Accomplish with Its Machine Tool Business

The annual sales of Nidec Machine Tool, Nidec OKK, and PAMA combined are approximately 87 billion yen. By generating synergies between these three companies and other Nidec Group companies, and implementing new M&As, the Company plans to achieve sales of more than 260 billion yen in its machine tool business in the fiscal year of 2025 (and 500 billion yen in the fiscal year of 2030). Nidec stays committed to actively investing in the industry of machine tools, which are dubbed as “machines of machine” or “mother machines,” and contributing to the development of Japan’s machinery sector.

5. Effects on Financial Performance for the Current and Next Fiscal Years

The Stock Acquisition is expected to have no significant impact on the Company’s consolidated financial performance for this fiscal year ending March 31, 2023. If necessary, the Company will make additional disclosure on a timely basis in accordance with the rules of the Tokyo Stock Exchange upon determination of further details.

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 Transaction not being realized, changes in general economic conditions, shifts in technology or user preferences for particular technologies 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230201005454/en/

Masahiro Nagayasu

General Manager

Investor Relations

+81-75-935-6140

ir@nidec.com

Source: Nidec Corporation

FAQ

What is the significance of Nidec's acquisition of PAMA on February 1, 2023?

The acquisition enhances Nidec's machine tool business, leveraging PAMA's strong market presence in boring and milling machines.

How will the acquisition of PAMA affect Nidec's financial performance?

The acquisition is expected to have no significant impact on Nidec's consolidated financial performance for the fiscal year ending March 31, 2023.

What are Nidec's growth targets following the PAMA acquisition?

Nidec aims to achieve combined sales of over 260 billion yen by 2025, and 500 billion yen by 2030.

What challenges might Nidec face after acquiring PAMA?

Integration challenges could arise, potentially affecting the anticipated benefits and overall performance.