Nidec Announces Planned Launch of Tender Offer for Makino Milling Machine Co., Ltd.
Nidec Corporation has announced its decision to acquire shares of Makino Milling Machine Co., Ltd. (the “Target Company”), a leading manufacturer listed on the Prime Market of the Tokyo Stock Exchange. At a meeting of the Board of Directors held on December 26, 2024, Nidec resolved to initiate a tender offer to acquire the shares of the Target Company in a transaction aimed at making Makino Milling Machine Co., Ltd. a wholly owned subsidiary of Nidec. The acquisition will be carried out pursuant to the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended), and is part of Nidec’s strategy to strengthen its position as a global leader in the machine tool manufacturing industry.
In conjunction with this announcement, Nidec will submit a Letter of Intent to Makino Milling Machine Co., Ltd. detailing the proposed terms and conditions of the transaction. The submission of this Letter of Intent represents the formal commencement of the process, with the goal of obtaining the approval and understanding of the Target Company and its shareholders.
Transaction Overview and Tender Offer Preconditions
The planned tender offer will be subject to the satisfaction of all the necessary preconditions, as outlined in the “Tender Offer Preconditions” section of the full press release. These conditions must be fulfilled or waived by Nidec before the offer can proceed. Should all conditions be met, the tender offer is expected to commence on April 4, 2025. However, this date could be delayed if the preconditions are not satisfied in time, and the offer will be initiated as soon as practicable thereafter.
The primary aim of this press release is to ensure that all relevant stakeholders, including Makino’s shareholders, fully understand the content of the Letter of Intent and the proposed transaction. Nidec intends to provide ample time for consideration, enabling the Target Company’s shareholders to evaluate the merits of the offer.
Commitment to Transparency and Shareholder Engagement
Prior to the submission of the Letter of Intent, Nidec had not engaged in discussions with Makino regarding the transaction. This aligns with the guidelines set forth by Japan’s Ministry of Economy, Trade and Industry in August 2023 under the “Guidelines for Corporate Takeovers – Enhancing Corporate Value and Securing Shareholders’ Interests.” These guidelines emphasize the importance of shareholder consent and transparency during corporate acquisitions, and Nidec is committed to providing Makino’s shareholders with the necessary information to make an informed decision about the offer.
In line with the “Principle of Shareholders’ Intent” and the “Principle of Transparency,” Nidec intends to work with the Target Company’s management to ensure shareholders receive clear, positive information about the proposed transaction. This process will enable the Target Company’s shareholders to evaluate whether the transaction’s terms and conditions are in their best interest.
Strategic Rationale for the Acquisition
As outlined in the full version of the press release, Nidec recognizes the strength of Makino Milling Machine Co., Ltd. as a major player in the machine tool manufacturing sector. Nidec believes that through this acquisition, the two companies will be able to combine their resources and expertise to become “the world’s leading comprehensive machine tool manufacturer.” The proposed transaction represents an important step in Nidec’s broader strategy to expand its global footprint and leadership in the industry.
Key Details of the Tender Offer
- Tender Offeror: Nidec Corporation
- Target Company: Makino Milling Machine Co., Ltd.
- Type of Securities to be Tendered: Common stock of the Target Company
- Tender Offer Price: ¥11,000 per share
- This price reflects a premium over various historical price averages, including:
- 41.94% above the closing price of ¥7,750 on December 26, 2024 (the base date)
- 54.67% above the 1-month average closing price of ¥7,112
- 67.89% above the 3-month average closing price of ¥6,552
- 74.24% above the 6-month average closing price of ¥6,313
- This price reflects a premium over various historical price averages, including:
- Number of Shares to be Purchased:
- Upper limit: None
- Lower limit: 11,694,400 shares (50% of the total shares, excluding treasury stock)
- The minimum number of shares may be adjusted based on the total number of outstanding shares as of the commencement date.
- Commencement of the Tender Offer: April 4, 2025 (subject to the fulfillment of preconditions)
- Tender Offer Period: 31 business days, with a potential extension if the required number of shares is not tendered initially.
- Tender Offer Agent: Mita Securities Co., Ltd. (with Monex, Inc. as Sub-Agent)
Next Steps and Additional Information
Nidec intends to provide Makino’s Board of Directors and any special committee set up by the company with a detailed explanation of the tender offer in good faith to secure their support. If the Board or the committee requests further information, Nidec has committed to responding in a timely and transparent manner. The offer’s schedule will be updated as the preconditions are met and additional details become available.
For further information, the full press release and Letter of Intent detailing the terms of the transaction can be found at: Nidec Press Release.
