Japan¡¯s Nidec and private equity firm KPS Capital Partners are competing to acquire Siemens AG¡¯s Innomotics large motors business, which could fetch about €3 billion (?483.6 billion) in a sale, according to people familiar with the matter.
The suitors have been invited to make second-round bids for Innomotics, the people said, declining to be identified because the information is private.
Kyoto-based Nidec, a maker of precision and automotive motors, is perceived as a natural buyer for the Siemens unit. New York-based KPS is known in Germany for the acquisition of Thyssenkrupp¡¯s Waupaca iron foundry in 2012 and its subsequent sale to Hitachi Metals. It wasn¡¯t immediately clear if other suitors remain.
Deliberations are ongoing, and there¡¯s no certainty they will lead to a transaction. Representatives for Siemens and KPS declined to comment, while a representative for Nidec couldn¡¯t comment on the matter.
Shares in Nidec dropped as much as 3.2%, the most in seven weeks, following the news report. It would be the biggest deal so far for the Japanese company if it succeeds in acquiring Innomotics, data shows. Nidec has a market value of about $22 billion.
Innomotics, which makes heavy-duty electric motors used in ships and mining equipment, generates earnings before interest, taxes, depreciation and amortization of €300 million to €400 million a year, people familiar with the matter have said.
Siemens carved out Innomotics as a legally separate business last year and has said it plans to list the company on the stock market or sell it. Goldman Sachs Group and BNP Paribas are advising Siemens on options for the business, the people said. A representative for Goldman Sachs declined to comment.
Selling the unit would mark a big step for Siemens¡¯s revamp, in which the company has exited heavy-equipment businesses and moved toward higher-margin, software-driven product lines to catch up to the profitability levels of rivals.
It has offloaded most of the smaller divisions destined for divestment, alongside spinoffs of businesses like gas turbine manufacturer Siemens Energy and health-care equipment-maker Siemens Healthineers.
For Nidec, the acquisition would mark a major deal at a time when the company¡¯s billionaire founder, CEO Shigenobu Nagamori, is handing over to Mitsuya Kishida. The incoming CEO will lead Nidec¡¯s nascent push into electric-vehicle motors.
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