Nidec’s unsolicited bid for Makino – Wave of consolidation in the machine tool industry

The machine tool industry is experiencing a significant wave of consolidation, with Nidec making headlines. On December 27, Nidec announced a tender offer (TOB) for Makino. The acquisition deal could exceed 250 billion yen. Other major manufacturers, such as DMG MORI, have also been pursuing mergers and acquisitions (M&A) initiatives and TOB deals in recent years, signaling a broader trend of restructuring throughout the industry. 

Tender offer price set at 11,000 yen per share 

Nidec’s announcement of the unsolicited TOB for Makino on December 27 shocked the industry, as many companies were wrapping up their last business day of 2024. The offer price was set at 11,000 yen per share, representing a 41.9% premium over Makino’s December 26 closing price of 7,750 yen. Nidec aims to acquire all of Makino’s outstanding shares, excluding treasury shares, for a total purchase price of over 250 billion yen. 

Nidec initiated the TOB without prior consultation with Makino. In order to provide Makino’s management and shareholders with sufficient time for deliberation, Nidec scheduled the TOB to commence on April 4. 

In response, Makino established a special committee consisting of four independent directors on January 10. On January 15, Makino submitted a letter requesting Nidec to postpone the start date of the TOB and to raise the minimum share purchase threshold. However, on January 17, Nidec announced its intention to reject these requests. On January 22, Makino sent another request to Nidec, again requesting the postponement of the TOB start date and the increase in the minimum share purchase threshold. 

Nidec targets sales of 600 bln yen by 2030 

Nidec entered the machine tool industry in 2021 with the acquisition of Mitsubishi Heavy Industries Machine Tool, now known as Nidec Machine Tool. Since then, the company has prioritized M&A to establish the machine tool business as a key pillar of growth. In 2022, Nidec acquired OKK (now NIDEC OKK), followed by the acquisitions of Italian horizontal boring machine manufacturer PAMA and TAKISAWA in 2023. 

Currently, Nidec’s machine tool business generates annual sales in excess of 100 billion yen. The company aims to increase this figure to 600 billion yen by 2030. The acquisition of Makino is expected to accelerate this growth by complementing Nidec’s product lineup and creating synergies in production and sales operations. 

Global consolidation trends in the machine tool industry 

The wave of consolidation is not limited to Nidec. Other prominent manufacturers around the world have also been actively pursuing M&A and TOB strategies, reshaping the industry. 

In January, DMG MORI acquired KURAKI (now DMG MORI Precision Boring). Later in December, it successfully completed a TOB for TAIYO KOKI, making it a wholly owned subsidiary. 

Outside of Japan, Switzerland’s UNITED GRINDING Group announced its acquisition of GF Machining Solutions in October 2024, attracting considerable attention. In November 2023, two prominent Swiss companies – Starrag and Tornos – completed a merger, marking another milestone in the industry. 

These moves, including Nidec’s TOB for Makino this time, highlight the global momentum of consolidation that could reshape the global machine tool and factory automation industry. Industry players need to pay close attention to this trend. 

– Trends in M&A of major machine tool and FA-related companies –

By: Atsushi Kuwasaki, Staff Editor, SEISANZAI Japan