Investing.com– Precision motor manufacturer based in Kyoto Nidec Company (TYO:) announced plans to launch a 257 billion yen ($1.6 billion) tender offer to acquire industrial equipment supplier Makino Grinding Machinery Co., Ltd (You:).
The offer, at 11,000 yen per share, represents a 42% premium to Makino's closing price on Thursday.
Nidec has not discussed the offer with Makino's board of directors and plans to proceed even without its approval, provided regulatory conditions are met. The tender offer is scheduled to be launched on April 4 after Nidec completes regulatory procedures, the company said.
Makino shares were not trading Friday, while Nidec shares jumped more than 5%.
The offering is consistent with Nidec's strategy to expand into higher-margin growth segments as it faces challenges such as declining demand for hard drives and intense competition in China's electric vehicle market.
Nidec, the world's leading manufacturer of small engines, seeks to consolidate the industry 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 goals.
The move is not Nidec's first unwanted acquisition. 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 guidelines for mergers and acquisitions last year to encourage such acquisitions.
While the company is open to negotiating with Makino's board, Nidec has made clear that it intends to move forward with the offer regardless of Makino's initial response.
