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Emerson sells motors and controls businesses to Nidec

18 August, 2010

Emerson Electric is selling its Motors and Appliance Controls businesses to Japan’s Nidec Corporation, which claims to be the world`s leading manufacturer of small precision motors, including motors used in optical and hard disk drives. The agreement will provide a strong new North American presence for Nidec’s motor-related operations. The details of the agreement have not been revealed but reports in  Japan suggest that the deal is worth ¥60-70bn (£445-520m).

The sale covers two Emerson businesses – Commercial and Industrial Motors (CIM) and Emerson Appliance Motors and Controls (EAMC) – which together generated sales worth $836m in the year to 30 September, 2009. These businesses have sites in the US, Mexico, China, India and the UK and employ about 6,000 people worldwide, including 1,700 in the US.

The deal includes UK-based SR Drives, which employs about 40 people, mostly involved in research and engineering of switched reluctance drives. The Harrogate-based operation which grew out of research work at Leeds and Nottingham Universities, was founded in 1980. It currently undertakes research, development, and licensing of its SR technology and other advanced electrical drive technologies. A manufacturing operation, SR Drives Manufacturing, was established in 1999.

Emerson will continue to run its Leroy-Somer large motors business in France, its hermetic motors business, which produces compressor motors, and its US-based Emerson Air Comfort Products, which makes ceiling fans.

The CIM operation produces motors for commercial and domestic applications ranging from water treatment, mining and power generation, to air-conditioning and commercial refrigeration. EAMC is the largest supplier of appliance motors in the US, and also produces motors, controls and switches for the automotive and commercial markets.

Kyoto-based Nidec manufactures small and medium-size precision motors and fans for IT, consumer electronics, appliance, automotive and industrial applications. The company, which has sales worth around $8bn, also manufactures electronic/optical components and machinery.

Nidec has been working to expand its activities in the automotive, industrial and home appliance markets, based on its core brushless DC motor technology. It has also been accelerating its acquisition activities with the aim of growing into a global operation with annual sales worth two trillion yen by 2015. In January 2010, it acquired Sole Motors, based in Italy and Hungary. Its previous acquisitions included the motor division of Valeo in France in 2006, and Hitachi`s Japan Servo operation, in 2007.

Nidec says the Emerson Motors and Controls’ acquisition will provide a global business base and will  complement and expand its product lineup. It adds that EMC’s strong US foothold, combined with its own  operations in Asia and Europe, will enable the group to operate in all of the world’s key geographical areas and to address the needs of rapidly globalising customers.

“We are very excited about the potential for future growth of these businesses as part of Nidec Corporation,” says Shigenobu Nagamori, Nidec’s founder and CEO (above). “Emerson’s reputation for innovation, quality and service built over the years is very much aligned with Nidec’s principles and values. These businesses will be key to our long-term business strategy as we invest and further strengthen our capabilities in the North American market.”

Nidec intends to keep Emerson’s existing facilities and current management and employees, and will run the businesses from a headquarters building on the Emerson campus in St Louis that is currently home to Emerson’s Motor Technology Center.

“Emerson was committed in this process to assuring that if the businesses were sold, they would end up in the hands of a strong company that would create a successful environment for its employees and customers,” says Craig Ashmore, Emerson’s executive vice-president for planning and development. “While there was considerable interest from many solid companies, Nidec Corporation’s proposal provided overwhelming value for everyone: our customers, employees and shareholders.”

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