Posted to News on 3rd Aug 2016, 00:00
Emerson sells Control Techniques and Leroy Somer to Nidec
Emerson has announced that it is selling its motors, drives and electric power generation business to Nidec, in deal worth $1.2bn. The all-cash deal includes Leroy Somer, Control Techniques and other businesses based in the US, China and India, and is the largest acquisition that Japan-based Nidec has ever made.
Nidec has been actively developing a new growth platform with particular focus on industrial and commercial business. It has been actively seeking strategic acquisitions to gain geographic reach and product line-ups that complement its existing operations.
It had long been suspected that Emerson was trying to divest itself of Control Techniques, with the company saying that it was exploring options for these operations. Emerson acquired Leroy Somer in 1990 and Control Techniques in 1995. Between the two, they brought Emerson a combined revenue of $1.7bn in 2015.
Emerson Chairman and Chief Executive Officer David Farr said: “This announcement represents another step in our strategic repositioning to restructure and align our business amidst a challenging global macroeconomic environment. Upon completing the transaction, Emerson will be better positioned to accelerate growth and value creation over time, while Nidec will have a unique opportunity to strengthen its global motor presence and expand into drives and power generation.
This is not the first bit of business between the two companies, as Nidec acquired two motor company businesses in August 2010 – Emerson Commercial Industrial Motors and Emerson Appliance Motors and Controls.
The deal is expected to conclude during the third quarter of FY2016.
