Nidec in Advanced Talks to Sell Components Unit to Carlyle for Over ¥100 Billion, Nikkei Reports

Japanese electric motor manufacturer Nidec Corp. is in final-stage negotiations to sell its electronic parts subsidiary, Nidec Components, to U.S. private equity firm Carlyle Group, according to a report from the Nikkei on Tuesday. The potential deal is valued at more than 100 billion yen ($636 million) and would represent the first major subsidiary divestiture by the company.

Strategic Rationale

The proposed sale is a key part of a broader business restructuring aimed at accelerating a turnaround at Nidec by streamlining its operations. By divesting the components unit, Nidec intends to sharpen its focus on its core business of producing precision electric motors for the automotive and industrial sectors.

Nidec Components was originally founded in 1967 as Copal Electronics and was converted into a wholly-owned subsidiary of Nidec in 2014.

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Corporate Overhaul and Market Impact

This divestiture plan comes as Nidec grapples with the aftermath of a significant governance scandal over the past year. The company is reportedly facing a potential impairment charge of as much as 1 trillion yen ($6.3 billion). The news also coincided with a major leadership change, as Nidec announced on Tuesday that President and CEO Mitsuya Kishida had resigned from his positions, effective immediately.

Following the reports, investors reacted positively to the restructuring efforts. Shares of Nidec rose 3.4% in Wednesday's trading, snapping a two-day losing streak.