Nidec Corporation has made headlines with its recent announcement of a tender offer (TOB) aimed at acquiring Makino Milling Machine Co., marking a significant move within the machinery manufacturing industry. The offer, set at 11,000 yen per share, signifies Nidec's ambition to fully acquire the company and expand its operational scope.
The announcement, made on December 27, 2023, outlines the aggressive financial backing of Nidec, which is poised to spend approximately 257 billion yen to secure at least 11,694,400 shares, representing 50% of Makino's ownership. This tender offer is particularly noteworthy because it will not impose any upper limit on the number of shares Nidec aims to buy, indicating its serious intent to consolidate its position.
What adds intrigue to this acquisition is the manner of its execution. Nidec has not sought prior agreement from Makino, hinting at the hostile nature of the bid. According to Reuters, the offered price is at a premium of 41.9% over Makino’s last closing price of 7,750 yen, which demonstrates Nidec's commitment to making the acquisition attractive to shareholders.
Nidec has set the commencement date for the tender offer for April 4, 2025. By directly publicizing the offer without prior consultations with Makino, Nidec aims to maintain transparency throughout the process. "We intend to conduct discussions to improve the corporate value of both companies after the acquisition is confirmed," stated Nidec representatives.
The market's reaction has been significant, with Makino’s share prices responding favorably to the announcement as they are expected to align closer to the TOB price. This kind of price adjustment reflects investor confidence and speculation on the outcome of the offer.
Nidec's approach isn't entirely new; the company has garnered past experience with hostile takeovers. This includes their previous acquisition of TAKISAWA, which was also conducted without prior agreements. Financial analysts have weighed in on this strategy, noting the potential benefits such as increased production efficiency and market strength. A chief strategist from Daiwa Securities asserted, "If Nidec initiates the TOB, based on its history, it may not face significant resistance, which is perceived positively by the market."
Such assertive measures signal Nidec's intentions to solidify its status as a leader within the industry. The machinery sector has been witnessing increased mergers and acquisitions as companies strive for consolidation and for position against global competition.
Should Nidec’s tender offer succeed, it could lead to significant changes within Makino, potentially prompting the company to delist from the stock exchange after fulfilling necessary regulatory requirements. Nidec’s prior acquisitions have also included other notable machinery manufacturers, reflecting its broader strategy of expansion through mergers and acquisitions. This recent move indicates the company's dedication to positioning itself strategically within various facets of the machinery industry.
The tender offer by Nidec for Makino has not only sparked interest among investors but is also viewed as part of the broader trend of consolidation within the machinery sector. Industry analysts are now focused on how both Nidec and Makino will respond to the forthcoming developments, particularly concerning stakeholder reactions and any strategic responses from Makino's management.
Moving forward, the dynamics between Nidec and Makino will be closely watched as the April 2025 date approaches. The outcome of this tender offer could set precedents for future transactions within this sector, especially considering the increasing complexity and competitiveness of global markets.
Overall, Nidec's action highlights the continuously shifting nature of the machinery manufacturing industry, dominated by aspirations for growth and operational enhancement through strategic acquisitions.
