Wednesday, August 18, 2010

Emerson sells motor business to Japanese firm

Two Emerson Motor Company businesses included in sale

Emerson has agreed to sell its Motors and Appliance Controls businesses to Nidec Corporation of Kyoto, Japan. The agreement reached with Nidec will provide a new U.S./North American presence for Nidec’s global motor and motor-related business. Nidec said it intends to retain existing facilities and current management and employees.

“Emerson was committed in this process to assuring that if the businesses were sold, they would end up in the hands of a strong company that would create a successful environment for its employees and customers,” said Craig Ashmore, Executive Vice President, Planning and Development, Emerson. “While there was considerable interest from many solid companies, Nidec Corporation’s proposal provided overwhelming value for everyone: our customers, employees and shareholders."

Included in the sale are two Emerson Motor Company businesses – Emerson’s Commercial and Industrial Motors (CIM) and Emerson Appliance Motors and Controls (EAMC).

Emerson will continue to operate its hermetic motors business, which serves Emerson Climate Technologies’ Copeland Scroll compressors, and also will continue to operate the large motor business based in Europe (Leroy-Somer) as well as Emerson Air Comfort Products in the U.S., which makes their Emerson Ceiling Fan.

Nidec, based in Kyoto, Japan, is about an $8 billion precision manufacturer of small and medium-size motors and fans for IT/consumer electronics, automobiles, home appliances, and industrial applications. The company also manufactures electronic/optical components and machinery.

The affected Emerson divisions reported more than $800 million in combined sales in fiscal 2009 and employ 6,000 people, including 1,700 in the U.S. and several hundred in St. Louis.

Nidec plans to open a U.S. headquarters on Emerson's St. Louis campus and lease space from Emerson Motor Technology Center, keeping all the local jobs here at substantially the same wages and benefits, said Mark Polzin, an Emerson spokesman, according to the St. Louis Business Journal. Patrick Murphy, president of Emerson motors and appliance controls, will join Nidec to lead the business locally.

The newspaper estimated the selling price to be about $700 million.

Nidec’s opening a U.S. headquarters in St. Louis could eventually lead to more jobs in the region. “These businesses of motors and control technologies will be key to our long-term business strategy as we invest and further strengthen our capabilities in the North American market,” Shigenobu Nagamori, founder and CEO of Nidec, said in a statement Tuesday evening, according to the Journal.

The Commercial & Industrial Motors are used in water treatment, mining, oil and gas, power generation, air conditioning condensers, rooftop cooling towers and commercial refrigeration.

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