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Nidec to acquire Embraco

Japanese firm Nidec has announced it will acquire Embraco, Whirpool Corporation’s compressor business, in a deal worth US$1,080 million.

While Nidec has traditionally been known as a major manufacturer of electric motors, it has recently added compressors to its product portfolio, first with the purchase of the Secop Group in 2017, and now with the acquisition of Embraco. And Nidec has confirmed that this is part of a broader business strategy.

“The company expects the huge refrigerator compressor sector, accounting for 170 million units per year, will provide attractive growth opportunities,” says a press release from Nidec. “Through the transaction, Nidec’s Global Appliance Division is able to strengthen its refrigeration compressor business and expand its product reach and geographic footprint.”

Nidec added that stricter environmental regulations in 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,” the company says. “Nidec also believes its best in class brushless DC motor technology will complement Embraco’s compressors.”

Because similar components are used in the manufacture of motors and compressors, Nidec expects to leverage economies of scale to reduce procurement costs.

The sale includes Embraco operations in Brazil, Uruguay, Slovakia, Luxembourg and China and is expected to take place in early 2019.

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