Nidec acquires OKK to strengthen its machine tool business

Strategic move follows acquisition of Nidec Machine Tool

On November 18, 2021, Nidec announced that it would acquire a majority stake in OKK, a machine tool manufacturer. The two companies signed a capital alliance agreement on the same day. Nidec will make OKK a subsidiary by underwriting a third-party allotment of new shares, with an expected shareholding ratio of 67%. The acquisition cost is approximately 5.4 billion yen.

OKK, founded in 1915, specializes in small and medium-sized machine tools, particularly for automotive parts production. The company’s consolidated sales for the fiscal year ending March 2022 are projected at 15.7 billion yen, a 30% increase over the previous year, despite an expected net loss of 1.1 billion yen.

In 2021, OKK was placed under supervision by the Tokyo Stock Exchange due to improper accounting practices, including overstatement of inventory. Although the supervision was lifted in October, the company is in urgent need of business restructuring.

Complementary product lines to drive synergy

This acquisition follows Nidec’s earlier purchase of Mitsubishi Heavy Industries Machine Tool (now Nidec Machine Tool) in August 2021. That deal was aimed at enhancing gear machining technology and in-house production of EV drive motor components.

OKK and Nidec Machine Tool have non-overlapping product portfolios, and the acquisition is expected to generate synergies by combining their respective strengths. Nidec’s ongoing investment signals a clear long-term commitment to the machine tool business.