Nidec

As we at Nidec Corporation (Hiroyuki Yoshimoto, President and COO) would like to assist in the support of rescue and recovery efforts in the victimized areas, we have today decided to make a donation of JPY 7.5 million.

1.Donation amount: JPY 7.5 million

2.Recipient: Japanese Red Cross Society

We would like to convey our deepest sympathies to the victims of the typhoon along with our sincere wishes for the earliest recovery.

*Typhoon No.19 called “Hagibis” was a large and powerful tropical cyclone that was considered to be the most devastating typhoon to hit the Kantō region of Japan in the past 60 years.

Nidec Corporation (TSE: 6594; OTC US: NJDCY) (the “Company” or “Nidec”) announced today that it has adopted at a meeting of the Board of Directors held on August 1, 2019 a resolution to execute a contract with GAC Components Co., Ltd. (“GAC Components”), a member of China-based Guangzhou Automobile Group Co., Ltd. (“Guangzhou Automobile Group”), to establish a joint venture to manufacture automotive traction motors.
The closing of this case will be subject to approval by competition authorities.

1. Purpose of This Transaction and Operation Policy Going Forward
Nidec has been expanding and strengthening its automotive motor business, one of the Company’s strategically critical businesses, by setting the business’s target sales amount to 700 billion to one trillion yen under Vision 2020, the Company’s mid-term strategic goal.

Countries around the world have announced a ban on the sales of gasoline and diesel vehicles one after another to combat global warming and air pollution, making zero-emission vehicles a global trend. Accordingly, car manufacturers are launching measures globally, including the acceleration of the pace of introducing electric vehicles (“EV”) more than ever. As this trend of car electrification intensifies, the automotive motor market, strategically important for Nidec, is forecast to double its size to six trillion yen in 2030. Among all the products in the market, companies’ attention and Nidec’s particular focus are on the traction motor, one of the most important components to replace the existing internal-combustion engine.

GAC Components is a subsidiary of a major Chinese car manufacturer Guangzhou Automobile Group that has the sixth largest market share in the increasingly environmentally strict China. GAC Components mainly manufactures automobile interior parts, electric components, etc. for not only the EVs and PHEVs under the Guangzhou Automobile brand, which plays a significant role in the transition to EVs, but also joint ventures with Japanese car manufacturers.

GAC Components and Nidec, realizing the strategic importance of traction motors in the future automobile industry, have agreed to collaborate to produce low-cost, high-efficiency traction motors for Guangzhou Automobile Group.

The joint venture company will exploit Guangzhou Automobile Group’s collective know-how on finished vehicles mechanism and Nidec’s drive and electronics technologies to develop, manufacture, and sell low-cost, high-efficiency traction motors mainly for Guangzhou Automobile Group, and later, other car manufacturers as well. Further, the joint venture company will hire development engineers locally in China, which is abundant in such resources, to accelerate the pace of product development and design, while utilizing Guangzhou Automobile Group’s local purchasing capabilities to promote cost reduction.

2. The New Joint Venture Company:

*The yuan-yen currency exchange rate is based on Nidec’s expected FY2019 rate of 15.5 yen per yuan.

3. GAC Components:

*As a private company, GAC Components is exempt from rules of the Tokyo Stock Exchange which requires disclosure of non-consolidated performance or financial conditions for the last three years.

4. Schedule

5. Effect on Financial Performance for the Current Fiscal Year
The Transaction is expected to have no significant impact on Nidec’s consolidated financial performance for the fiscal year ending March 31, 2020. Nidec will make additional disclosure on a timely basis in accordance with the rules of the Tokyo Stock Exchange upon determination of further details.

Cautionary Statement Concerning Forward-Looking Information
This press release contains forward-looking statements regarding the intent, belief, strategy, plans or expectations of the Nidec Group or other parties. Such forwardlooking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors, including, but not limited to, the risks to successfully integrating the acquired business with the Nidec Group, the anticipated benefits of the planned transaction not being realized, changes in general economic conditions, shifts in technology or user preferences for particular technologies, whether and when required regulatory approvals are obtained, other risks relating to the successful consummation of the planned transaction, and changes in business and regulatory environments. The Nidec Group does not undertake any obligation to update the forward-looking statements contained herein or the reasons why actual results could differ from those projected in the forward-looking statements except as may be required by law.

Nidec Corporation (TSE: 6594) (OTC US: NJDCY) (the “Company” or “Nidec”) announced today that the Company completed the acquisition of the compressor business (“Embraco”) of Whirlpool Corporation (“Whirlpool”) on July 2, 2019 (July 1, 2019 local time in Brazil) following the European Commission’s approval granted on June 26, 2019. This acquisition was performed in line with the acquisition plan announced on April 24, 2018 in the Company’s press release titled “Nidec to Acquire Whirlpool Corporation’s Compressor Business.”

As a result of this acquisition, Embraco and their subsidiaries became Nidec’s subsidiaries. The details of the acquired companies are as follows. In addition, certain customary post-closing filings and registrations related to the acquisition of two subsidiaries in China of Embraco are expected to be completed by September 30, 2019.

1. Outline of the Acquired Companies

1) Change of Company Names
2) New Directors

2. Purpose of the Transaction and Future Operation Policy

Nidec has been actively developing a new growth platform with particular focus on appliance, commercial and industrial business. As part of this strategy, the Company is pursuing strategic acquisitions in the appliance industry. For this purpose, Nidec has created a new division named Nidec Global Appliance Division, which mainly consists of Nidec Sole Motor Corporation S.R.L. acquired in January 2010 and the appliance business of Nidec Motor Corporation acquired in September 2010. In July 2017, Nidec acquired Secop group (currently Nidec Global Appliance Compressors GmbH, etc.), which enabled the Company to enter into the household and commercial refrigeration compressor market. Combining with Embraco’s business, Nidec aimed to expand further its refrigeration compressor business.

However, as announced in its press release titled “Nidec to Sell Its Secop Compressor Business to ESSVP IV Advised by Orlando Management” dated April 22, 2019, Nidec through two Nidec’s subsidiaries will sell its compressor business, Secop, to ESSVP IV L.P., ESSVP IV (Structured) L.P., and Silenos GmbH & Co. KG, advised by Orlando Management AG, as condition for the European Commission’s approval of Nidec’s acquisition of Embraco.

Although Nidec will sell Secop group, the Company believes the acquisition of Embraco will allow Nidec to expand further into the global refrigeration compressor market. Embraco’s strength lies in industry-leading compressors for household and commercial refrigerators. Nidec has confidence in further strengthening its refrigeration compressor business through expanding its product portfolio and sales areas. In addition, ever stricter environmental regulations in major regions like Europe, the Americas and China are stimulating customer demand for eco-conscious and space-saving refrigeration compressors. Embraco’s advanced compressors meet such customer requirements. Nidec also believes its best in class brushless DC motor technology will complement Embraco’s compressors. Furthermore, because motors and compressors have similarities in terms of the nature of components used, Embraco expects to reduce procurement costs by taking advantage of synergies of the Nidec group’s purchase capabilities.

The Company believes that this acquisition will bring Nidec Group closer to its FY2020 sales target of two trillion yen as both parties’ technological capabilities, brands, and customer base come to blend well together.

3. Effect on Financial Performance for the Current Fiscal Year

Once the Company determines the impact of this acquisition on its forecast of financial performance for the current fiscal year, it will make appropriate disclosure pursuant to the rules of the Tokyo Stock Exchange.

Cautionary Statement Concerning Forward-Looking Information

This press release contains forward-looking statements regarding the intent, belief, strategy, plans or expectations of the Nidec Group or other parties. Such forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors, including, but not limited to, the risks to successfully integrating the acquired business with the Nidec Group, the anticipated benefits of the transaction not being realized, changes in general economic conditions, shifts in technology or user preferences for particular technologies and changes in business and regulatory environments. The Nidec Group does not undertake any obligation to update the forward-looking statements contained herein or the reasons why actual results could differ from those projected in the forward-looking statements except as may be required by law.