NSK and NTN agree to management integration to strengthen global competitiveness

NSK and NTN announced on May 12 that they had signed a basic agreement on management integration. The companies plan to establish a joint holding company in October next year through a joint share transfer, making both companies wholly owned subsidiaries. Amid slowing growth in key demand sectors and intensifying competition within the industry, the two major bearing manufacturers aim to achieve long-term profitable growth through the integration.

Combined scale would put NSK and NTN among the world’s top bearing makers

NSK and NTN are two of Japan’s leading bearing manufacturers, each with a history of more than 100 years. The two long-time rivals announced on May 12 the signing of a basic agreement on management integration.

According to both companies, they are in a challenging business environment. At a press conference held the same day, NSK President and CEO Akitoshi Ichii stated: “Growth in the automotive and industrial machinery sectors is slowing, and rapid expansion in existing markets is unlikely. The rise of Chinese manufacturers is also a threat.” NTN President and CEO Eiichi Ukai noted: “We have been pushing ahead with business reforms, but to remain competitive globally, we need to combine each other’s strengths.”

The bearing industry has been undergoing global consolidation, with major manufacturers increasingly joining forces. President and CEO Ichii remarked: “The global leader is Sweden’s SKF, followed by Germany’s Schaeffler. With our two companies — currently positioned just below them — integrating, simply combining our business scale would place us on a par with the global leaders.”

However, the purpose of the integration is not simply to expand scale, but to achieve long-term profitable growth driven by a shared sense of urgency over the business environment. A joint share transfer will be used to ensure an equal partnership. President and CEO Ukai commented: “As two companies each with a century of history, sustainable growth with the next 100 years in mind is essential. Our immediate challenge is to gain sufficient understanding both inside and outside our organizations.”

Focusing on growth sectors

The companies identified three strategic priorities for long-term growth: investment in and optimal use of management resources, transformation of the business portfolio, and pooling technologies, talent, and expertise beyond corporate boundaries. Specific measures include leveraging each other’s product lineups and customer bases, optimizing parts procurement, and improving the efficiency of research and development expenditure.

In addition, the companies plan to expand their presence in growth markets including robotics, medical devices, drones, and space-related sectors. In particular, both companies expect growth in markets related to robotics and artificial intelligence (AI) — encompassing both industrial and consumer applications — and indicated their intention to leverage their respective strengths in the development of bearings and linear motion components.

Going forward, the companies aim to conclude a final agreement within six months of signing the basic agreement on May 12, with the holding company to be established following approval at each company’s annual general meeting of shareholders scheduled for June 2027. The holding company is currently scheduled to be established in October 2027, with a simultaneous listing on the Tokyo Stock Exchange Prime Market also planned. Details including the company name and registered office location will be determined through further discussions, alongside ongoing compliance work related to U.S. securities law and competition laws in Japan and overseas.

Integration timeline