- Broad Ocean, Wolong Electric had also expressed interest
- French government said to be interviewing potential bidders
Japan’s Nidec Corp. is the leading bidder for Emerson Electric Co.’s motors and drives unit in a sale that may fetch about $1 billion, people familiar with the matter said.
China’s Zhongshan Broad Ocean Motor Co. and Wolong Electric Group Co. had also expressed interest in the Emerson business, two of the people said, asking not to be identified because the talks are private. A winner for the auction may be announced as soon as this week, according to one of the people. No final decisions have been made and Nidec may not be successful, they added.
Nidec, led by 71 year-old billionaire Chairman Shigenobu Nagamori, has been active in overseas acquisitions. The Japanese firm has cobbled together more than 40 companies to form the world’s biggest maker of precision motors used in hard disk drives, among myriad other products.
Nagamori has said he could envision buying a company with sales of as much as 1 trillion yen ($9.6 billion) to help grow Nidec’s revenue to 10 trillion yen, in an interview last year. The Kyoto, Japan-based company bought Emerson’s motors and appliance controls business in 2010 for an undisclosed amount, according to a press release.
The previous Nidec acquisition in 2010 included Emerson’s commercial and industrial motors as well as its appliance motors and controls, while excluding the large motor business based in Europe, also known as Leroy-Somer.
Leroy-Somer has been designing and manufacturing motors and alternators for the nuclear industry for more than 40 years, according to its company website. The French government is now interviewing bidders for the motors and drives unit, one of the people said.
Broad Ocean’s board secretary and its investor relations department didn’t immediately respond to requests for comment. Representatives for Nidec, Wolong and Emerson declined to comment. The French government is closely following the matter, said a spokeswoman for the Economy Ministry, who declined to comment on details of the process.
Emerson Chief Executive Officer David Farr in June 2015 announced plans to spin off the company’s network power division and explore options for other operations, including motors and drives, to focus on more profitable units.
The company’s sales and profit have been in decline as customers in the oil and gas industry grappled with dropping prices. Net sales fell 9 percent in the second quarter to $4.9 billion and earnings per share fell 60 percent to 57 cents, Emerson said in May.