Nidec's Strategic Move: Acquiring Makino Milling Machine Co., Ltd.

Nidec Corporation, a global leader in precision motors and automotive components, has made a significant strategic move by submitting answers to the third questionnaire from Makino Milling Machine Co., Ltd. This acquisition is part of Nidec's broader plan to enhance its market position and drive sales growth, particularly in the automotive and industrial sectors. The acquisition aligns with Nidec's medium-term strategic goals, which include achieving sales of four trillion yen and a Return on Invested Capital (ROIC) of 15% or more by FY2025.

Nidec's acquisition of Makino Milling Machine Co., Ltd. is a strategic move that aligns with its medium-term goals of achieving sales of four trillion yen and a ROIC of 15% or more by FY2025. The acquisition is expected to contribute 600 billion yen to the overall sales target, helping Nidec diversify its revenue streams and achieve its sales target. Additionally, the acquisition will support Nidec's goal of improving profitability and ROIC by leveraging synergies and economies of scale to improve operational efficiency and reduce costs.

The acquisition of Makino Milling Machine Co., Ltd. is expected to bring several potential synergies and competitive advantages to Nidec. Firstly, Nidec aims to leverage Makino's expertise in milling machines to bolster its own capabilities in precision manufacturing. This synergy can lead to the development of more advanced and efficient products, particularly in the automotive sector, where precision and reliability are paramount. Secondly, the acquisition will allow Nidec to expand its product portfolio, particularly in the area of high-value-added modules. Nidec's automotive business is already a significant contributor to its sales, with a target of 1,300 billion yen by FY2025. By integrating Makino's milling machine technology, Nidec can develop more sophisticated automotive products, such as electric power steering motors and brake motors, which are in high demand due to the global shift towards electric vehicles (EVs). Thirdly, the acquisition will enhance Nidec's capabilities in the industrial sector. Makino's expertise in milling machines can be integrated into Nidec's existing product lines, such as high-precision deceleration machines and high-efficiency electric motors. This integration can lead to the development of more efficient and reliable industrial equipment, which is in high demand due to the increasing automation and digitization of manufacturing processes.

The acquisition of Makino Milling Machine Co., Ltd. aligns with Nidec's broader ESG strategy by enhancing its capabilities in manufacturing and technology, which are crucial for achieving sustainability objectives. Nidec's ESG strategy focuses on realizing a carbon-free society, providing products and services that adapt to social changes, respecting human rights, promoting diversity, and building a competitive, international supply chain to address social issues. Nidec aims to achieve 100% usage of renewable energy in manufacturing by 2040 and implement circular economy practices across all operations. The acquisition of Makino Milling Machine Co., Ltd. will support these goals by integrating advanced manufacturing technologies and enhancing Nidec's ability to produce high-efficiency, low-carbon products. This acquisition will also contribute to Nidec's goal of reducing its carbon footprint by 30% by 2030 and increasing energy efficiency in products by 20%.

To ensure that the acquisition contributes to its sustainability objectives, Nidec is taking several steps. Firstly, Nidec is committed to providing Makino Milling Machine Co., Ltd. with necessary information in a timely and appropriate manner to facilitate their evaluation of the transaction. This transparency and collaboration will help in aligning the ESG goals of both companies. Secondly, Nidec plans to continue providing the Target Company with information that it needs to disclose its opinions regarding the Transaction, in a sincere, timely, and appropriate manner. This will ensure that the acquisition process is transparent and that both companies' ESG goals are considered. Additionally, Nidec's sustainability strategy includes environmental commitments such as achieving zero waste to landfill in all manufacturing facilities and social commitments such as ensuring 40% of leadership roles are held by women by 2025. The acquisition of Makino Milling Machine Co., Ltd. will support these commitments by integrating advanced manufacturing technologies and enhancing Nidec's ability to produce high-efficiency, low-carbon products. This will also contribute to Nidec's goal of increasing community engagement and development projects by 50%.

In summary, Nidec's acquisition of Makino Milling Machine Co., Ltd. is a strategic move that aligns with its medium-term goals of achieving sales of four trillion yen and a ROIC of 15% or more by FY2025. The acquisition will help Nidec diversify its revenue streams, improve profitability, and enhance its ESG performance, all of which are critical to achieving its strategic goals. The acquisition is expected to bring significant synergies and competitive advantages to Nidec, particularly in the automotive and industrial sectors. By leveraging Makino's expertise in milling machines, Nidec can enhance its product offerings, expand its market reach, and strengthen its position as a leading global company in precision manufacturing and advanced technologies. The acquisition also aligns with Nidec's broader ESG strategy, enhancing its capabilities in manufacturing and technology, which are crucial for achieving sustainability objectives. Nidec is taking steps to ensure that this acquisition contributes to its sustainability objectives by providing necessary information in a timely and appropriate manner, aligning ESG goals, and integrating advanced manufacturing technologies.