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Emerson Electric, St. Louis, has agreed to sell its commercial and industrial motors unit and its appliance motors and controls business to Nidec Corp., Kyoto, Japan, a manufacturer of small motors looking to expand its offerings in larger motor classes and establish a beachhead in the North American market. The operations, management, employees and production facilities will stay in St. Louis on Emerson Electric's campus.
Combined, Emerson Commercial and Industrial Motors and Emerson Appliance Motors and Controls accounted for more than $800 million in sales in fiscal 2009. Manufacturing facilities and technology centers for both businesses are in the United States, Mexico, China, India and the United Kingdom. The businesses employ about 6,000 people around the world, including 1,700 in the U.S. Terms of the all-cash deal were not disclosed.
Emerson has been evaluating a potential sale of the two business units over the past six months following an offer from an interested potential buyer, said Mark Polzin, an Emerson spokesperson.
“These businesses, while we had them a long time, really no longer had the growth profile that Emerson's been targeting through the business cycle. We're looking for faster overall long-term growth,” Polzin said. “As a result of this inquiry and the process that we started, we believed these businesses could perhaps be more successful and a better strategic fit somewhere else. In the end, these two businesses now have more potential for strong growth under a new owner whose focus is being number one in the motor and drive technology business.”
The acquisition gives Nidec a strong new presence in the United States and North America overall for growing its global motor and motor-related business. Nidec had sales in 2009 of over $8 billion, most of it in small and medium-sized OEM motors for IT, consumer electronics, automotive, appliance and industrial applications.
The acquisition of Emerson's motor and controls (EMC) business is part of a larger merger-and-acquisition strategy Nidec calls “Vision 2015” — a plan to grow the company's global annual sales to two trillion yen (approximately $23 billion) over the next five years, according to a Nidec release.