At a meeting of board of directors held on Aug. 9, Nidec Corp. resolved to have Nidec Sankyo Corp., a wholly owned subsidiary of the company, succeed the business of Tokyo Maruzen Industry Co. Ltd. by way of an absorption type company split. For this purpose, both companies have entered into an agreement under which Nidec Sankyo will form a new company to succeed the Tokyo Maruzen’s business.
Nidec has been developing its electric contact business since January 2014, when Nidec Sankyo acquired Mitsubishi Materials CMI Corp., currently Nidec Sankyo CMI Corp. Electric contact products used for relays, switches, circuit breakers and more are gaining popularity in the fast-growing EV and PHV market and are expected to expand their use into the appliance and industrial equipment market.
Nidec Sankyo and Tokyo Maruzen have entered into an agreement for transferring the entire business, including the mainstay electric contact business of Tokyo Maruzen in response to the surge in demand for electric contacts. Nidec believes the efficient use of the managerial and operational resources of Nidec Sankyo and Tokyo Maruzen will help strengthen their capacity in material development, production engineering and manufacturing responsiveness, which will lead to profitability improvement.
Nidec intends to make appropriate disclosures regarding the impact of the transaction described herein on its consolidated financial performance for the current fiscal year and announce any changes to its financial performance in accordance with the applicable rules of the Tokyo Stock Exchange once such details are determined.
The transaction will be funded by cash. There shall be no allotment of shares.