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Nidec to buy Omron’s automotive business for $890 million

Industrial components giant Nidec has agreed to acquire Omron’s automotive business, formally called “Omron Automotive Electronics”.

The two companies do not appear to have released the financial details of the agreement, but Nikkei is reporting that Nidec will pay $890 million for the company.

The share transfer will be executed after obtaining necessary approval and satisfying other conditions. It is projected to occur by the end of October. 

OAE started its business in 1983 as an automotive electronics components division of Omron Corporation, a massive industrial automation company.

OAE says it has since contributed to the development of the automotive industry by developing the world’s first infrared keyless entry system and electric power steering system.

In 2010, OAE was split from Omron, becoming its wholly-owned subsidiary and today, with four core businesses comprising:

  • body control systems;
  • motor control systems;
  • active safety systems; and
  • power control systems.

OAE is currently operating with the theme of technological innovation known as “Case”, short for “connected, autonomous, shared and electric”, which are each concurrent trends emerging in the global automotive industry and market.

OAE says the trends represent a “once-in-a-century transformation”.

Nidec, meanwhile, is one of the world’s leading motor manufacturing companies.

More recently, it has placed the automotive motor business as one of its strategically most important targets, and has been expanding its business through various investments.

The global automotive electronics market is currently valued by research company Radiant Insights at around $280 billion.

Another market analyst, Grand View Research, predicts that the global automotive electronics sector will be worth more than $400 billion a year.

And according to Verified Market Research, the largest automotive electronics companies include:

  • Infineon Technologies;
  • Maxim Integrated;
  • ON Semiconductor;
  • Omron;
  • Hitachi;
  • Texas Instruments;
  • ST Microelectronics; and
  • NXP.