Minebea, Mitsumi aim to become more than sum of their parts
Resource from: Nikkei Asian Review Likes:287
Dec 23,2015
TOKYO -- Japanese bearing maker Minebea and electronic parts manufacturer Mitsumi Electric on Monday said they will integrate their businesses in April 2017. The move is the companies' answer to stiff competition in the emerging field of Internet-enabled devices.
The combined entity will handle a broad range of products, from sensors to integrated circuits, communications equipment to motors. It will fuse Minebea's metal processing technology, developed through years of bearing production, and Mitsumi's electric circuit design know-how.
Minebea President Yoshihisa Kainuma, right, and Mitsumi Electric President Shigeru Moribe speak to reporters in Tokyo on Dec. 21.
Minebea President Yoshihisa Kainuma and Mitsumi Electric President Shigeru Moribe spoke to reporters on Monday in Tokyo about their decision. "Electronic parts are often subject to [market] fluctuations," Kainuma said. "Our mission is to build a system for the next generation."
Moribe stressed that parts manufacturers need to make high-performance components as small as possible, in order to accommodate the Internet of Things -- the ever-growing network of connected electronics and machinery. "When we look at the next five to 10 years, Minebea's precision processing technology will be indispensable," he said.
Under the plan, Minebea will swap Mitsumi shares with its own in April 2017, turning Mitsumi into a wholly owned subsidiary. The two companies are expected to decide on an equity exchange ratio in late March.
After the integration, the pair will reorganize and set up a joint holding company, with several group companies under its umbrella. Kainuma is to become chairman and president of the holding company, while Moribe is to become vice chairman.
Different trajectories
Minebea makes components -- mainly bearings and motors used in rotary parts -- for electronic devices, automobiles and aircraft. Leveraging its metal processing technology, the company also manufactures light-emitting diode backlight units for liquid crystal display panels. It controls about 70% of the market for LED backlights for high-end smartphones.
The company, based in Japan's central Nagano Prefecture, reported record group sales of 500.6 billion yen ($4.1 billion) for the year ended March.
Mitsumi Electric, meanwhile, logged sales of 153 billion yen for the same year. The Tokyo-based company enjoyed strong sales up until the late 2000s, thanks in part to its contract manufacturing services for clients such as Nintendo. This business, however, has shrunk due to a slowdown in the traditional video game market. Mitsumi's sale have declined by nearly half, compared to the peak in the year ended March 2008.
At the same time, Mitsumi faces more competition in the market for drive units used in smartphone cameras -- one of its strengths. It has decided to hold off on firing up a new production facility in the Philippines until March; the original start date was in this past October. For the year through March, the company expects to post a 1.5 billion yen net loss.
"Intelligent" beds
Minebea and Mitsumi are joining a growing realignment wave in the electronic components business. In mid-December, Japanese electronic parts maker TDK announced that it is acquiring Micronas Semiconductor Holding, a Swiss manufacturer of sensor components for automobiles. TDK is trying to cope with declining demand for PC hard-disk drives.
Minebea and Mitsumi aim to pool their strengths to achieve further growth. For instance, they plan to develop "intelligent" medical beds equipped with Minebea's load sensors and Mitsumi's wireless communications equipment. The beds will allow health care professionals to monitor and analyze a patient's condition remotely.
In addition, they intend to use their sensor and networking know-how to develop advanced driver assistant systems, which promise to make cars safer.
The duo is betting that by sharing expertise, they can reach a higher level of technological sophistication, reduce costs and cut delivery times. Still, they will face a host of challenges before they can cash in on synergies. Sales and marketing operations will need to be consolidated. Product lineups will have to be streamlined. As is often the case, the biggest task may be bridging their corporate cultures.
Minebea President Yoshihisa Kainuma, right, and Mitsumi Electric President Shigeru Moribe speak to reporters in Tokyo on Dec. 21.
Minebea President Yoshihisa Kainuma and Mitsumi Electric President Shigeru Moribe spoke to reporters on Monday in Tokyo about their decision. "Electronic parts are often subject to [market] fluctuations," Kainuma said. "Our mission is to build a system for the next generation."
Moribe stressed that parts manufacturers need to make high-performance components as small as possible, in order to accommodate the Internet of Things -- the ever-growing network of connected electronics and machinery. "When we look at the next five to 10 years, Minebea's precision processing technology will be indispensable," he said.
Under the plan, Minebea will swap Mitsumi shares with its own in April 2017, turning Mitsumi into a wholly owned subsidiary. The two companies are expected to decide on an equity exchange ratio in late March.
After the integration, the pair will reorganize and set up a joint holding company, with several group companies under its umbrella. Kainuma is to become chairman and president of the holding company, while Moribe is to become vice chairman.
Different trajectories
Minebea makes components -- mainly bearings and motors used in rotary parts -- for electronic devices, automobiles and aircraft. Leveraging its metal processing technology, the company also manufactures light-emitting diode backlight units for liquid crystal display panels. It controls about 70% of the market for LED backlights for high-end smartphones.
The company, based in Japan's central Nagano Prefecture, reported record group sales of 500.6 billion yen ($4.1 billion) for the year ended March.
Mitsumi Electric, meanwhile, logged sales of 153 billion yen for the same year. The Tokyo-based company enjoyed strong sales up until the late 2000s, thanks in part to its contract manufacturing services for clients such as Nintendo. This business, however, has shrunk due to a slowdown in the traditional video game market. Mitsumi's sale have declined by nearly half, compared to the peak in the year ended March 2008.
At the same time, Mitsumi faces more competition in the market for drive units used in smartphone cameras -- one of its strengths. It has decided to hold off on firing up a new production facility in the Philippines until March; the original start date was in this past October. For the year through March, the company expects to post a 1.5 billion yen net loss.
"Intelligent" beds
Minebea and Mitsumi are joining a growing realignment wave in the electronic components business. In mid-December, Japanese electronic parts maker TDK announced that it is acquiring Micronas Semiconductor Holding, a Swiss manufacturer of sensor components for automobiles. TDK is trying to cope with declining demand for PC hard-disk drives.
Minebea and Mitsumi aim to pool their strengths to achieve further growth. For instance, they plan to develop "intelligent" medical beds equipped with Minebea's load sensors and Mitsumi's wireless communications equipment. The beds will allow health care professionals to monitor and analyze a patient's condition remotely.
In addition, they intend to use their sensor and networking know-how to develop advanced driver assistant systems, which promise to make cars safer.
The duo is betting that by sharing expertise, they can reach a higher level of technological sophistication, reduce costs and cut delivery times. Still, they will face a host of challenges before they can cash in on synergies. Sales and marketing operations will need to be consolidated. Product lineups will have to be streamlined. As is often the case, the biggest task may be bridging their corporate cultures.
(Nikkei Asian Review)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
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