Teco Electric & Machinery Co (東元電機), one of the nation’s leading industrial motor suppliers, has agreed to acquire Motovario SpA of Italy in a bid to expand into the power transmission systems sector.
Teco on Friday said its board had approved a proposal to acquire a 100 percent stake in Motovario for 186 million euros (US$204.79 million).
The deal is expected to complete by the end of this year, when the company expects to start including the Italian firm’s sales on its books, the company said.
Teco spokesperson Yeh Wen-chung (葉文中) said the acquisition is part of the company’s strategy to expand from standalone products into system products.
The deal is expected to enhance Teco’s ability to develop power transmission systems, Yeh said.
Teco is also set to take advantage of the acquisition to further enhance its capability in automation and smart device manufacturing, which is expected to herald its rollout of “Industry 4.0,” he said.
Founded in 1965, Motovario produces and markets large gear reducers, motors and other power-transmission products, with a focus on worm gears for which it is a global player.
Motovario operates highly automated production facilities in Italy and Spain and also has 150 sales agents in 60 nations. Last year, the firm expanded its business by acquiring Pujol, a manufacturer of gear reducers based in Spain.
The European market accounted for more than 50 percent of the company’s total sales last year, while the Italian firm also shipped its products to other markets, including the US, China and Indonesia.
“I am convinced that Teco will strengthen the growth path of Motovario favoring further market expansion, especially in Southeast Asia, developing significant synergies in research and products development,” Motovario chief executive officer Maurizio Negro said in a statement.
Last year, Motovario posted about NT$4 billion (US$126.25 million) in sales and was in the black. Yeh said the deal is expected to raise Teco’s revenue and boost market share in Europe.
Teco is the world’s third-largest producer of medium-voltage motors, with about 8 percent of global sales and the fifth-largest supplier of low-voltage A/C motors, with a 4 percent market share.
Last year, Teco posted NT$2.05 in earnings per share, compared with NT$2 the previous year.
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