Amada to buy welder Miyachi

Joining the two firms' technologies expected to expand market share for processing machines for automobiles.

Tokyo, Japan – According to the Nikkei's February 13th morning edition, Amada Co., a major sheet metal fabricating system builder and a leading supplier of laser metal cutting systems, said Tuesday that it will make a tender offer for Miyachi Corp. with the goal of turning the welder manufacturer into a wholly owned subsidiary. Miyachi expressed support for the offer the same day.

Amada will buy all of Miyachi's outstanding shares by mid-June for as much as 10 billion yen on the purchase. The aim is to join the two firms' technologies to expand share of the market for processing machines for automobiles. The tender offer runs from Wednesday to March 21. Amada is offering 870 yen per share, a 23.58% premium over Miyachi's closing price Friday.

Industrial Laser Solutions views this arrangement as beneficial for Miyachi. The operations of these companies have been complimentary. And a resulting new structure could make more effective use of Miyachi's resources and strengthen sales activities and service.

Amada,which expects sales of 193 billion yen for the year ending March 31, is strong in welding machines for precision work, and its laser welders are believed to have the top share in the domestic market. Its sales came to 20.3 billion yen for the year ended June 2012.

In acquiring Miyachi, Amada will take on German manufacturer Trumpf, a strong player globally in both sheet metal machines and laser welders.

The growing importance of laser technology in the metalworking field set the stage for Amada to launch its tender offer for Miyachi. Processing machines that use laser beams do not need blades and are easy for inexperienced workers to operate. They can also give curved metal an even smoother finish.

Amada makes laser processing machines with enough power for thick sheets but has been looking to broaden its line-up to include laser products that process thin sheets for electronic components /content/ils/en/laser-micromachining.html. The firm aims to develop laser processing machines with Miyachi.

Amada's processing machines are used in the production of home appliance components and kitchen equipment, but have only a limited presence in automobile manufacturing. Miyachi, on the other hand, has many auto industry clients.

Amada is targeting 300 billion yen in sales for fiscal 2015, a roughly 50% increase over the projected figure for the current fiscal year.

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