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Nidec To Reorganize Group Companies Through Corporate Split Transactions Between Nidec And A Subsidiary And Between Subsidiaries

2. Summary of the Proposed Group Company Reorganization

Outline of the Proposed Corporate Split Transactions

(1) Nidec's management of the following subsidiaries (the "Nidec Motor Subsidiaries") will be transferred through an absorption-type corporate split transaction to NMHD:

<<Nidec Motor Subsidiaries>>

  • NIDEC MOTOR CORPORATION
  • NIDEC MOTOR CANADA CORPORATION
  • NIDEC MOTOR COLOMBIA SAS
  • NIDEC MOTOR (CARACAS) SA
  • Compania de Motores Domesticos, S.A. de C.V.
  • Rotores S.A. de C.V.
  • Controles Electromecanicos de Mexico S.A. de C.V.
  • Nidec Motor (Qingdao) Motor Co., Ltd.
  • Emerson Laminaciones de Acero de Monterrey, S.A. de C.V.
  • Motores Reynosa, S.A. de C.V.
  • Motores U.S. de Mexico S.A. de C.V.
  • SR Drives Manufacturing Limited
  • Switched Reluctance Drives Limited

(2) NTMC's management of its subsidiary, Nidec Sole Motor Corporation S.R.L. ("Nidec Sole Motor"), will be transferred through an absorption-type corporate split to NMHJ.

3. Description of the Proposed Corporate Split Transactions

(1) Proposed Transfer of Nidec's management of the Nidec Motor Subsidiaries to NMHJ through a Corporate Split Transaction

(1) Schedule for the Corporate Split Transaction

February 5, 2011   Board Approval of the Transaction (Nidec and NMHJ)
February 5, 2011   Execution of Corporate Split Agreement (Nidec and NMHJ)
February 25, 2011 (Plan)   Shareholder Meeting to Approve the Transaction (NMHJ)
April 1, 2011 (Plan)   Effective Date of the Transaction

(Note) In accordance with Article 784, Paragraph 3, of the Company Act of Japan, Nidec intends to use a simplified absorption-type corporate split procedure where Nidec's shareholder approval is not required for the transaction.

(2) Method of Corporate Split

The planned corporate split transaction is expected to be an absorption-type corporate split transaction where a portion of Nidec's operations will be transferred to NMHJ.

(3) Shares Issued in Connection with the Corporate Split Transaction

In connection with the planned corporate split transaction, NMHJ will issue one share of its common stock to Nidec.

(4) Changes to Stock Acquisition Rights and Bonds with Stock Acquisition Rights as a Result of the Corporate Split Transaction

No changes are expected to the stock acquisition rights or the bonds with stock acquisition rights issued by Nidec as a result of the planned corporate split transaction.

(5) Changes in Capital as a result of the Corporate Split Transaction

No increase or decrease is expected to Nidec's common stock or additional paid-in capital as a result of the planned corporate split transaction.

(6) Rights and Obligations to Be Assumed by the Transferee

NMHJ is expected to assume the assets and liabilities and contractual and other rights and obligations relating to the subsidiary management functions of Nidec with respect to the Nidec Motor Subsidiaries that are being transferred to NMHJ.

(7) Anticipated Impact on Performance of Financial Obligations

As the planned corporate split transaction will be entered into between Nidec and NMHJ, a wholly owned subsidiary of Nidec, the planned transaction is not expected to result in an impairment of the ability of Nidec or NMHJ to perform their respective financial obligations.

(8) Overview of the Companies Party to the Corporate Split Transaction

     
  Nidec NMHJ
(1) Company name Nidec Corporation Nidec Motor Holdings Corporation
(2) Description of business Development, manufacture and sales of small precision motors, small precision fans, and mid-size motors Management, and other businesses incidental thereto, of subsidiaries and other group companies that are engaged in the home appliance general motor business
(3) Date of incorporation July 23, 1973 October 1, 2010
(4) Address of head office 338 Tonoshiro-cho, Kuze Minami-ku, Kyoto 338 Tonoshiro-cho, Kuze Minami-ku, Kyoto
(5) Company representative Shigenobu Nagamori Chairman of the Board, President and Chief Executive Officer Shigenobu Nagamori Representative Director and Chairman
(6) Share capital 66,551 million yen 10 million yen
(7) Number of issued shares 145,075,080 200
(8) Fiscal year end March 31 March 31
(9) Major shareholders and shareholding ratios (as of September 30, 2010) 1. Shigenobu Nagamori 8.23% 2. Japan Trustee Services Bank, Ltd. (Trust account) 6.94% 3. The Master Trust Bank of Japan, Ltd. (Trust account) 6.72% 4. The Bank of Kyoto, Ltd. 4.08% 5. SN Kohsan, Ltd.  3.79% 6. The Dai-ichi Life Insurance Co., Ltd. 3.04% 7. The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2.42% 8. Nippon Life Insurance Company 2.32% 9. Meiji Yasuda Insurance Company 2.19% 10. MOXLEY AND CO. 1.96%   (Note) Nidec, holding 5,784,000 shares of treasury stock (3.98%), has been excluded from the list of major shareholders above. Nidec Corporation 100%
     
  Nidec NMHJ
(10) Financial results for, and financial condition as of and of, most recent fiscal year Fiscal year ended March 31, 2010 (Consolidated, in millions of yen) Not applicable as NMHJ was incorporated on October 1, 2010.
Net assets 401,531
Total assets 692,791
Net assets per share (yen) 2,443.16
Net sales 587,459
Operating income 78,342
Net income 51,961
Net income per share (yen) 373.04
Annual dividend per share (yen) 65

(Note) Nidec prepares its financial statements in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), as follows:

- "Net assets" represents the sum of "shareholders' equity" and "noncontrolling interests."

- "Net assets per share" represents "shareholders' equity per share."

- "Ordinary profit" is omitted because there is no corresponding item under U.S. GAAP.

- "Net income" and "net income per share" represent "net income attributable to Nidec" and "net income attributable to Nidec per share," respectively.

- Pursuant to FASB Accounting Statements Codification (ASC) 205-20, "Presentation of Financial Statements-Discontinued Operations" (formerly SFAS No. 144, "Accounting for the impairment or disposal of Long-Lived Assets."), results of discontinued operations have been reclassified retrospectively in Nidec's consolidated financial data.

(9) Summary of the Operations Subject to the Corporate Split Transaction

Subsidiary management functions with respect to the Nidec Motor Subsidiaries

(10) Changes Immediately Following the Corporate Split Transaction

No changes are expected with respect to the registered corporate name, principal businesses, registered headquarters, representative's name and title, capital or fiscal year of Nidec or NMHJ immediately following the planned corporate split transaction.

(11) Expected Impact on Financial Results

As the proposed corporate split transaction will be entered into between Nidec and NMHJ, a wholly owned subsidiary of Nidec, the proposed transaction is not expected to have a material impact on Nidec's consolidated results of operations.

(2)     Proposed Transfer of NTMC's Subsidiary Management Operations Relating to Nidec Sole Motors to NMHJ through a Corporate Split Transaction

(1) Schedule for the Corporate Split Transaction

February 5, 2011  Board Approval of the Transaction (NTMC and NMHJ) Board Approval of the Transaction (NTMC and NMHJ)
February 5, 2011   Execution of Corporate Split Agreement (NTMC and NMHJ)
February 25, 2011 (Plan)   Shareholder Meeting to Approve the Transaction (NTMC)
April 1, 2011 (Plan)   Effective Date of the Transaction

(Note)     In accordance with Article 796, Paragraph 3, of the Company Act of Japan, NMHJ intends to use a simplified absorption-type corporate split procedure where NMHJ's shareholder approval is not required for the transaction.

(2) Method of Corporate Split

The proposed corporate split transaction is expected to be an absorption-type corporate split transaction where a portion of NTMC's operations will be transferred to NMHJ.

(3) Shares Issued in Connection with the Corporate Split Transaction

As the proposed corporate split transaction will be entered into between wholly owned subsidiaries of Nidec, no shares or other consideration will be issued or paid to NTMC.

(4) Changes to Stock Acquisition Rights and Bonds with Stock Acquisition Rights as a Result of the Corporate Split Transaction

Not applicable.

(5) Overview of the Companies Party to the Corporate Split Transaction

     
  NTMC NMHJ
(1) Company name Nidec Techno Motor Holdings Corporation Nidec Motor Holdings Corporation
(2) Description of business Development and sales support for subsidiary products, and centralized purchasing of raw materials for subsidiaries Management, and other businesses incidental thereto, of subsidiaries and other group companies that are engaged in the home appliance general motor business
(3) Date of incorporation September 25, 2009 October 1, 2010
(4) Address or head office 338 Tonoshiro-cho, Kuze Minami-ku, Kyoto 338 Tonoshiro-cho, Kuze Minami-ku, Kyoto
(5) Company representative Kimura Toshihiro President Shigenobu Nagamori Representative Director and Chairman
(6) Share capital 2,500 million yen 10 million yen
(7) Number of issued shares 100,000 200
(8) Fiscal year end March 31 March 31
(9) Major shareholders and shareholding ratios Nidec Corporation 100% Nidec Corporation 100%
(10) Financial results for, and financial condition as of and of, most recent fiscal year Fiscal year ended March 31, 2010 (Japanese GAAP) NMHJ does not have data representing financial results and financial condition for the most recent fiscal year because it was incorporated on October 1, 2010.
Net assets 4,924 million yen
Net assets per share 49,249 yen 80 sen
Net sales 473 million yen
Operating loss 116 million yen
Ordinary loss 99 million yen
Net loss 75 million yen
Net loss per share 750 yen 19 sen
Annual dividend per share None

(6) Expected Impact on Financial Results

As the proposed corporate split transaction will be entered into between wholly owned subsidiaries of Nidec, the planned transaction is not expected to have a material impact on Nidec's consolidated results of operations.

Cautionary Statement Concerning Forward-Looking Information

This press release contains forward-looking statements regarding the intent, belief, strategy, plans or current expectations of Nidec 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 anticipated benefits of the planned transactions not being realized, shifts in technology or user preferences for particular technologies, and changes in economic or regulatory environments. Nidec does not undertake any obligation to update the forward-looking statements contained herein, nor to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law.

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