(Bloomberg) — Nidec Corp. is offering ¥257.3 billion ($1.6 billion) to buy machine maker Makino Milling Machine Co. to take over, initiating a rare unsolicited takeover of a Japanese company.
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The Kyoto-based precision and automotive engine maker said it is offering ¥11,000 per share for Makino Milling, a 42% premium to Thursday’s closing price. Makino Milling shares were not trading Friday morning due to a glut of buy orders. Nidec shares rose as much as 5.3% after the announcement of the takeover bid, which was previously reported by the Nikkei as a hostile bid.
Nidec, the world’s largest mini-motor maker, is battling both lackluster demand for hard drives and cutthroat prices in China’s electric vehicle market. It has sought entry into higher-margin growth areas under new leadership. Eighty-year-old founder Shigenobu Nagamori stepped aside in April and tasked Mitsuya Kishida as CEO to spearhead the company’s move into EV engines.
Nagamori has said he will stay on to boost the group’s acquisitions and is willing to spend as much as ¥1 trillion to reach ¥10 trillion in sales by March 2031. Since 1984, Nagamori and his hand-picked M&A team have led more than 70 projects. offers. If successful, a deal with Makino Milling would be Nidec’s largest deal and would mark at least the second time the 51-year-old company has made an unsolicited takeover attempt.
Founded in 1937, Makino Milling supplies machine tools to the aerospace, automotive, semiconductor and construction industries. Customers include robot manufacturers Daifuku Co. and Fanuc Corp., as well as Toyota Tsusho Corp. and Nikon Corp., according to data compiled by Bloomberg.
Nidec said it has not yet had discussions with Makino Milling. While it will try to win over the company’s board, it plans to proceed with its bid if certain conditions are met, the company said in a statement. It expects the tender to begin on April 4.
Many Japanese machinery companies are priced cheaply, partly because of their close ties with automakers, said Hideyuki Suzuki, managing director at SBI Securities. With a price-to-book ratio of less than 1, “Makino Milling may need to reevaluate its capital policy,” he said.
It is not the first time that Nidec has attempted a potentially hostile takeover, in a country where such deals are usually agreed in advance. Last year it announced an unsolicited bid for Takisawa Machine Tool Co., which ultimately agreed to the deal.
