Makino Milling's Strategic Maneuvers: A Closer Look at Nidec's Unsolicited Bid

In a surprising turn of events, Japanese manufacturing giant Makino Milling Machine Co. (Makino) has requested changes to Nidec Corp.'s (Nidec) unsolicited takeover bid, marking a strategic shift in the acquisition landscape. Makino, a leading provider of high-precision machine tools, has asked Nidec to push back the tender offer launch date to May 9 from April 4 and to revise the minimum takeover threshold to two-thirds from one-half. This move highlights Makino's commitment to maximizing shareholder value and exploring potential synergies with Nidec.



Nidec, the world's top manufacturer of precision motors, announced its intention to acquire Makino on December 27, 2024, offering a 42% premium over Makino's closing share price on that day. The acquisition, valued at approximately 257 billion yen ($1.6 billion), would be Nidec's largest to date, according to LSEG data. Makino's board has not agreed to the offer, as Nidec had not proposed the bid before announcing it. However, Makino has indicated that it will release its opinion on the offer after examining it.

Makino's strategic maneuvers can be seen as an attempt to strengthen its position in the negotiations and potentially secure a more favorable deal. By pushing back the tender offer launch date, Makino gains more time to evaluate the offer, engage with its shareholders, and explore alternative options. Increasing the minimum takeover threshold to two-thirds from one-half could also make the acquisition more challenging for Nidec, potentially leading to improved terms for Makino shareholders.

Nidec's response to Makino's requests will be crucial in determining the likelihood and terms of the acquisition. If Nidec agrees to Makino's demands, it could indicate a willingness to negotiate and potentially improve the chances of a successful acquisition. However, if Nidec refuses to make these changes, it could lead to a more contentious acquisition process or even a failed attempt. Additionally, Nidec's response could influence the final terms of the acquisition, such as the price per share or the structure of the deal.



The potential synergies of combining Makino's and Nidec's product portfolios and market reach are significant. Makino's expertise in high-end machine tools, particularly in five-axis milling machines, complements Nidec's focus on precision motors and machine control systems. By integrating these two product lines, Nidec can offer a more comprehensive range of products to its customers, catering to a broader spectrum of industries and applications. This could lead to increased market share and revenue growth. Additionally, Makino's strong global presence could help Nidec expand its market reach and tap into new regions and industries.

In conclusion, Makino Milling's strategic maneuvers in response to Nidec's unsolicited bid highlight the company's commitment to maximizing shareholder value and exploring potential synergies. As the acquisition process unfolds, both parties will need to navigate the complexities of the negotiations and weigh the potential benefits and risks. The outcome of this strategic dance will be closely watched by investors and industry observers alike, as it could set a precedent for future acquisitions in the Japanese manufacturing sector.