EC clears Embraco deal but Nidec must sell refrigeration business
EUROPE: The acquisition of compressor manufacturer Embraco by Japanese company Nidec has been approved by the European Commission, but Nidec must sell its domestic and light commercial refrigeration compressor business.
The Commission opened an in-depth investigation into the proposed acquisition in November, concerned that the takeover announced in June of last year might reduce competition in the supply of refrigeration compressors.
Nidec decided to address the Commission’s competition concerns by proposing a set of commitments, including the sale of its refrigeration compressor business. This includes plants in Austria, Slovakia and China and removes the entire overlap between Nidec and Embraco in the markets where the Commission had identified competition concerns.
The sites concerned were acquired with the former Secop compressor business bought by Nidec in 2017.
Nidec also committed to make available to the purchaser of the divestment business significant funding for future investments in the facilities. This funding is dedicated to investments in production lines in Nidec’s plants in Austria and Slovakia.
The amount made available is equal to the capital expenditure that Nidec would have committed to the two plants without the transaction. The Commission considers that this will ensure the future viability and competitiveness of the Austrian and Slovak plants.
The Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the EEA and worldwide. The Commission’s decision is conditional on full compliance with the commitments.
Commissioner Margrethe Vestager, in charge of competition policy, said: “Most people have at least one refrigeration compressor at home, in a fridge or a freezer. They are also used in restaurants or shops, inside beverage coolers or ice cream cabinets. The conditions under which we have approved Nidec’s acquisition of Embraco ensure that effective competition will continue in this sector, so that industrial customers and final consumers will not be harmed due to higher prices or less choice. We have also worked to ensure the viability of the plants to be divested by Nidec.”
Today’s decision follows an in-depth review of the proposed transaction. This involves the acquisition by Nidec of Embraco, combining two leading global producers of refrigeration compressors used in household and light commercial appliances.
Embraco, based in Brazil, is active in the manufacture and sale of refrigeration compressors for refrigeration appliances. Embraco manufactures compressors in Slovakia, Brazil, Mexico and China. Embraco is owned and controlled by US company Whirlpool.
EC investigates Embraco acquisition – 29 November 2018
EUROPE: The European Commission has opened an in-depth investigation into Nidec’s proposed acquisition of refrigeration compressor manufacturer Embraco under the EU merger regulations. Read more…
Nidec to acquire Embraco – 24 April 2018
JAPAN: Nidec, the Japanese manufacturer of electric motors, is to increase its expansion into the refrigeration market with the acquisition of compressor company Embraco. Read more…
Whirlpool confirms Embraco sale – 24 April 2018
USA: Whirlpool has confirmed its intention to sell the Embraco compressor business to the Japanese Nidec Corporation, with the transaction expected to close in early 2019. Read more…
Embraco factory closure postponed – 4 March 2018
ITALY: Workers at the threatened Embraco refrigeration compressor factory in Riva di Chieri have received a postponement of redundancy until the end of the year. Read more…
Nidec completes Secop purchase – 1 August 2017
JAPAN/GERMANY: Nidec is to expand further into the refrigeration market following the completion of its acquisition of German hermetic compressor manufacturer Secop. Read more…
Nidec to acquire Secop for €185m – 25 April 2017
JAPAN/GERMANY: Japanese electric motor company Nidec is set to acquire hermetic compressor manufacturer Secop for €185m. Read more…