Please email ft@mergermarket.com or call EMEA: + 44 (0)20 7059 6105 Americas: +1 212 686-5277 Asia-Pacific: +852 2158 9730 for further information on mergermarket and how to receive more articles like the one below.
--------------------------------------------------------------------------------------------------------
Nidec, Japan’s No.1 maker of hard-disk drive motors, is interested in acquiring the motor business of Victor, a Japanese consumer electronics company in the midst of a sweeping restructuring, according to Nidec’s president Shigenobu Nagamori.
Victor’s unprofitable motor business is appealing to deal-hungry Nidec, said Nagamori. Nidec has grown through a string of acquisitions to become a USD 5.3bn company.
“If they (Victor) want to sell it (the motor business) to us,” he said, ”then we would take it.” Nagamori, expressing confidence in his own ability as a turnaround expert, emphasized, “We could be the only one who can buy them out.”
He showed strong interest in Victor after the ailing audio product maker had announced 24 July that it would move to be integrated with Kenwood in a deal that would unload a heavy burden from Matsushita Electric Industrial, which now owns 52.4% of Victor.
For the move, Victor will review its money-losing electronic device businesses, including the motor operations, for a possible disposal, said Victor President Kunihiko Sato. “We had been considering the continuation or a spin-off (of those struggling operations),” Sato said. For now “we will take another step” to stave off Victor’s deteriorating performance.
While Victor would not break out financial results by each product, its electronic device segment, which includes motor and other products, lost about USD 8.4m on top of revenues of about USD 330m for the year through March 2007.
One analyst expects Victor’s motor business to be the most likely among its device-related operations to be divested. That is because, he explained, it would be hard for Victor to turn the motor division around in a market dominated by Nidec with more than a 70% share. But the analyst pointed out that a Nidec-Victor deal could raise antitrust concerns in Japan.
An alternative buyer could be Seagate Technology, the listed California-based disk-drive maker, said another analyst. ”They (Seagate) could want to self-manufacture motors” by taking over Victor.
Seagate, which posted USD 11.4bn in revenues for the year through June 2007, declined comment, but has long expressed interest in acquisitions. Earlier this year, CEO Bill Watkins told this news service in an interview that Seagate planned to be a survivor amid global industry consolidation. He predicted at that time that Japan’s listed Toshiba and Hitachi, along with South Korea’s Samsung Electronics, and Seagate would be the four hard drive suppliers left standing.
Victor forecast that it will lose about USD 88m on a net basis for the year ending in March 2008 for a fourth consecutive year of loss. Its revenues for the year are expected to be about USD 6.3bn.
--------------------------------------------------------------------------------------------------------
mergermarket is an M&A intelligence tool focused on providing actionable, origination intelligence to its client base of the world’s principal advisory firms, investment banks, law firms, private equity firms and corporates. mergermarket provides clients with articles such as the one above in real-time via an online platform and personalized email, BlackBerry alerts and an online platform. For more information;
please email ft@mergermarket.com or call EMEA: + 44 (0)20 7059 6105 Americas: +1 212 686-5277 Asia-Pacific: +852 2158 9730
