NTN Corporation (NTN) today announced that NTN and Nidec Corporation (Nidec) have signed a basic agreement to unwind their joint ventures for manufacturing sintered-alloy fluid dynamic bearing units (FDB units) used in electric motors for hard disc drives (HDD).
NTN and Nidec had formed two joint ventures to assemble FDB units in China and Thailand, respectively, through the establishment of NTN-Nidec (Zhejiang) Corporation (NNSC) in 2002 and NTN-NIDEC (THAILAND) CO., LTD. (NNTC) in 2005. Currently, both joint venture companies are 60% owned by NTN and 40% by Nidec.
The basic agreement reached today allow NTN to sell all of NTN's interest in both joint venture companies and thereby make them wholly-owned subsidiaries of Nidec.
1. Reasons for Unwinding Joint Ventures
NTN and Nidec reviewed the ongoing joint venture operations from a profit enhancement perspective and concluded that NTN should concentrate in manufacture and sale of FDB, and FDB unit assembly lines should be operated in a closer alignment with Nidec's motor assembly operations going forward. On this basis, Nidec is acquiring full control of NNSC and NNTC, to take over the entire FDB unit assembly lines of the joint ventures.
2. Schedule
Upon approval by the local authority on or after August 1, 2009, NTN will transfer all of its shares in NNSC and NNTC to Nidec. Simultaneously, NTN and Nidec will enter into a licensing agreement under which NTN offers Nidec its expertise in the assembly of FDB units. In the meantime, NTN will continue to supply key parts for FDB units to Nidec.
NTN will develop FDB business for HDD motors globally to expand the business, striving product development and sale for new applications.
3. Outline of Joint Venture Companies
Outline of NNSC
Company name : NTN-Nidec (Zhejiang) Corporation
Line of business : Manufacture and sale of FDB units for HDD motors
Establishment : August 2002
Location : Pinghu Economic Development Zone, Zhejiang, China
Paid-in-capital : 21 million U.S. dollars
Number of Employees : 1,200
Ownership : 60% by NTN, 40% by Nidec (before unwinding the joint venture)
Outline of NNTC
Company name : NTN-NIDEC (THAILAND) CO., LTD.
Line of business : Manufacture and sale of FDB units for HDD motors
Establishment : November 2005
Location : The Eastern Seaboard Industrial Estate, Rayong, Thailand
Paid-in Capital : 600 million Thai Barts
Number of Employees : 1,500
Ownership : 60% by NTN, 40% by Nidec (before unwinding the joint venture)
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