Nidec shares jump as it proposes unsolicited $1.6 billion Makino takeover bid

Investing.com– Kyoto-based precision motor manufacturer Nidec Corp (TYO:6594) has announced plans to launch a 257 billion yen ($1.6 billion) tender offer to acquire industrial gear supplier Makino Milling Machine Co Ltd (TYO:6135).

The offer, priced at ¥11,000 per share, represents a 42% premium to Makino’s closing price on Thursday.

Nidec did not discuss the offer with Makino’s board and plans to proceed even without its approval, provided regulatory conditions are met. The tender offer is scheduled to launch on April 4 after Nidec clears regulatory processes, the company said.

Shares of Makino were untraded Friday, while Nidec’s stock jumped more than 5%.

The offer aligns with Nidec’s strategy to expand into higher-margin growth sectors as it faces challenges such as subdued demand for hard drives and intense competition in China’s electric vehicle market.

Nidec, the world’s leading manufacturer of mini motors, has been pursuing industry consolidation through aggressive acquisitions under the leadership of founder Shigenobu Nagamori. While Nagamori stepped down as CEO in April, his successor Mitsuya Kishida continues to push the company’s ambitious growth targets.

This move is not Nidec’s first unsolicited takeover. In 2022, the company made a hostile bid for Takisawa Machine Tool Co., which eventually agreed to the acquisition. The Japanese government, aiming to promote industry consolidation, issued M&A guidelines last year encouraging such takeovers.

While the company is open to negotiating with Makino’s board, Nidec has made it clear that it intends to proceed with the bid regardless of Makino’s initial response.