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HOME > News Release > 2015 > Notice on the Signing of a Joint Venture Contract with Autoliv, of Brake Control and Brake Apply Businesses (Summary)

Notice on the Signing of a Joint Venture Contract with Autoliv, of Brake Control and Brake Apply Businesses (Summary)

9 September, 2015

 

Company Name: Nissin Kogyo Co., Ltd.

Representative: Eiji Okawara, President

Contact: Ichihei Kojima, Director, Accounting Dept.

Telephone: 0268-24-3111 

 

Notice on the Signing of a Joint Venture Contract with Autoliv, of Brake Control and Brake Apply Businesses (Summary)

 

As of 9 September, 2015, the board of directors of Nissin Kogyo Company, Ltd. have unanimously agreed to the Transfer of 4-wheel brake control and brake apply businesses (including engineering, R&D, production & sales, etc., Hereafter referred to as “Business”) of the NK Group to a joint venture company in collaboration with Autoliv Inc. and its subsidiaries, and under that agreement signed the Contract for the Joint Venture with Autoliv on the same day.

 

 ※For details, please see “Notice on the Signing of a Joint Venture Contract of Our Brake Control and Brake Apply Businesses By means of Company Split, Business/ Share Transfer”

 

 1.Purpose of the Joint Venture”

 Nissin Kogyo and the NK Group has, over the years, run and expanded its business of manufacturing brake components for automobiles and motorcycles, with a goal of becoming the World’s Number One manufacturer of brake systems. In the motorcycle business, we have a global share of 70% for hydraulic brake systems, and have maintained a high global share of 25% for brake systems as a whole, and through expansion in emerging markets we will keep striving towards that goal.

In the automobile business, our goal is to continue to our growth in integrated brake systems and expand sales with global manufacturers.  To maximize the growth potential of this business, we see the need to quickly expand our global reach and engineering capabilities.  Therefore, we judged it best to team up with a partner having a strong presence in automotive safety, and develop the automobile business together..

 The Autoliv Group, based in Sweden, is our partner for the Transaction, and with global sales of approximately 9.2 billion US dollars for 2014, is one of the world’s leading suppliers of automotive safety systems, with over 60,000 employees in 80 facilities located in 28 countries worldwide. The NK Group has collaborated with the Autoliv Group on numerous occasions in the field of ESC systems, the latest being the joint sales of ESC systems for the Chinese market, and over the years have nurtured mutual understanding of each other through such partnerships.

By combining NK Group’s expertise and capabilities of R&D and production of brake systems with the Autoliv Group’s expertise and R&D resources of electronic control unit (ECU) s, sensing units such as radars, not to mention the global sales capabilities and customer base, we hope to establish a win-win relation for further growth in the brake apply/ brake control businesses.
 

2.Outline of the Joint Venture

The business of R&D, production, and sale of automobile brake control/ brake apply systems will go to the Joint Venture, with Japan, the United States, and China as main business areas. The shareholders of the four joint venture companies is planned to be the NK group (49%) and the Autoliv group (51%).

 

3.Schedule of the Transaction

Board of Directors’ Meeting:

9 September, 2015

Reference date of General Shareholders’ Meeting (Plan):

30 September, 2015

General Shareholders’ Meeting (Plan):

11 November, 2015

Closing Date (Plan):

1 February, 2016

 

4.Transaction Value

The expected value of the business to be transferred to the joint venture is approximately JPY 33.2 Billion.

 

5.Operating performance of the Business

(In Millions, JPY)

 

Fiscal Year Ended 31 March, 2015

Net Sales

69,029

(Note) Amount stated above does not include intercompany transactions between NK Group companies.

 

6.Future Projections

The Transaction in total is expected to generate a gain of about some 40 billion JPY (51% resulting from the transfer itself, 49% from fair market valuation of the assets and liabilities transferred), and therefore will have significant impact on our consolidated financials for FY 2015. While we are currently in the process of reviewing our financial projections for the fiscal year, in order to properly assess the impact of the Transaction we must analyze other factors as well, including the revision of our business portfolio, etc. On finalization of the analysis we will promptly disclose such information.

The joint venture companies will aim for further orders from our current customers, which should result from our being able to respond to their requirements with more speed and precision than before. In addition, we will expand our customer base through more active promotion to manufacturers worldwide.

For Nissin Kogyo, the joint venture companies will become affiliates, and therefore 49% of their revenue, along with the dividends, will be reflected on our consolidated financials. The resources we will gain in the Transaction will be used to energize future growth of our business in the motorcycle market, through expansion of sales to India and NEXT markets, brand promotion by Moto GP and other race activities, further R&D on high-value products including new materials, advanced brake systems for motorcycles, while also strengthening our profit structure. With these measures we hope to strengthen the NISSIN brand and strive for higher status in the market, expanding our business and stabilizing our profit structure further.




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