Nidec to Execute a Capital Alliance Agreement to Purchase Stake in OKK Corporation via Third-party Share Allocation

1. Outline of OKK in relation to the Third-party Allocation of Shares

2. Outline of the Share Purchase

3. Number of Shares to Acquire, Acquisition Price, and Status of Share Ownership before and after the Share Acquisition

4. Purpose of the Share Purchase

The Share Purchase achieves a mutual complement of products in the area of machine tool, an existing area of businesses where Nidec operates. Synergies are expected especially in such areas as element technology development, manufacturing, and sales of the machine tool business by Nidec Machine Tool Corporation, which joined the Nidec Group this August. After the Share Purchase, OKK will hold a prominent position as well in Nidec’s machine tool business.

A well-established machinery manufacturer founded more than 100 years ago, OKK is a growing company that engages in businesses required in each era, ranging from its initial business of manufacturing centrifugal pumps and water meters to textiles. Recent years have seen the company mainly focused in the field of machine tools, a basis of all industries, and successfully obtain trust from a wide range of its customers thanks to the company’s high and versatile basic machining capability required for a mother machine. However, after being concentrated on prior and existing sales activities in Japan and postponing entry into rapidly changing overseas markets, OKK, partially due to its slow pace of work efficiency improvement, has been unable to keep up with the pace of the rising foreign demand in the entire machine tool industry, and faced with the problem of a shrinking business scale. While observing some effects of its structural reform, the company was affected by the nationwide shutdown of economic activities and peopleto-people communication due to COVID-19 pandemic, remaining in struggle during the fiscal year ended March 31, 2021.

By joining Nidec via the Share Purchase, OKK will make a fresh start as a comprehensive machine tool builder, to enhance its product assortment and sales capability, while quickly reinforcing its production capacity as well. Combining OKK’s competitive and highly versatile machining centers with Nidec Machine Tool’s large machines, such as double-column machining centers with five-face machining function and horizontal boring and milling combined machines, will enable us to accommodate manufacturing requirements for various sizes – from small parts to large components – and enable both OKK and Nidec Machine Tool (the “Two Companies”) to significantly increase their overall capability of suggesting machining solutions. In addition, by utilizing Nidec’s business knowhow and networks, OKK will be able to launch businesses globally while expanding its customer base in Japan, and the company’s field of business will expand significantly. On a technological front, too, while OKK mainly manufactures small to medium-size versatile machining centers, Nidec Machine Tool, Japan’s leading gear machine manufacturer, also produces large machines (double-column machining centers with five-face machining function, horizontal boring and milling combined machines), advanced laser micromachines, and metal additive manufacturing (3D printing) related products and various special purpose machines. Therefore, combining the Two Companies’ technologies will enables us to develop new products that neither of them has in its lineup at present. In the area of production, the Two Companies will be able to improve their efficiency and expand their production capacity through utilization of their production bases, while being able to invest in their collaborative production bases in Japan and/or overseas.

After the Share Purchase, Nidec intends to further expand Nidec Machine Tool’s business, and believes that it can grow globally at a faster pace by making necessary investments where they are needed on a timely basis. We hope to mutually exploit our group’s and OKK’s respective technological capability, brand power, and customer bases to contribute to the development of the machine tool market on a global scale.

5. Schedule