Nidec Corporation announced that its Board of Directors has approved a resolution to acquire the compressor business (“Embraco”) of Whirlpool Corporation. For this purpose, Nidec entered into a stock purchase agreement. The purchase price is US $1,080 million (on a cash-free and debt-free enterprise value basis) and the consideration will be all cash.
Nidec has been actively developing a new growth platform with a particular focus on its appliance, industrial and commercial business.
Nidec Corporation acquired Secop, other manufacturer of refrigeration compressors, one year ago. Prior to the acquisition of Secop, Nidec’s Global Appliance Division mainly focused on manufacturing and sales of wet appliances such as motors for washing machines, dryers and dishwashers. Through the acquisition of Secop and Embraco, the Company added compressors to its product portfolio, which allows the Company to expand further into the refrigeration sector. The Company expects the huge refrigerator compressor sector, accounting for 170 million 2/5 units per year, will provide attractive growth opportunities. Embraco is well known as the global best in class in the refrigeration compressor sector, on account of its excellent technologies. Through the Transaction, Nidec’s Global Appliance Division is able to strengthen its refrigeration compressor business and expand its product reach and geographic footprint. In addition, ever stricter environmental regulations in major regions like Europe, the Americas and China are stimulating customer demand for eco-conscious and space-saving refrigeration compressors. Embraco’s advanced compressors meet such customer requirements. Nidec also believes its best in class brushless DC motor technology will complement Embraco’s compressors. Furthermore, because motors and compressors have similarities in terms of the nature of components used, Nidec’s Global Appliance Division expects to reduce procurement costs (to the benefit of customers) by taking advantage of synergies of the Nidec group’s purchase capabilities.
Overview of the Transaction
Nidec agreed to acquire from Whirlpool the shares of multiple subsidiaries comprising the Embraco business (excluding Embraco Europe S.r.l). Two Embraco entities located in China (Beijing Embraco Snowflake Compressor Company Limited and Qingdao Eecon Electronic Controls and Appliances Co. Ltd) would be acquired through a newly-created holding
company, the details of which have not yet been determined.
