Business and Capital Collaboration with GILDEMEISTER AG (of Germany)
Mori Seiki and the German company GILDEMEISTER AG (hereafter "GILDEMEISTER") reached an agreement on business and capital collaboration on 23rd March, 2009.
Background leading to business and capital collaboration
With the aim of expanding and cultivating its global opportunities in the machine tool market, Mori Seiki has been in conversation with GILDEMEISTER for a common business development.
Both Mori Seiki and GILDEMEISTER are leading sales companies in the Asian and European markets. With this cooperation both parties aim for success not only in their home regions, but also around the globe.
Mori Seiki has a sound sales result in Japan and United States, and is specially known for its multi-axis turning centers, machining centers and the lathe line. Based on its policy for vertical integration, Mori Seiki produces main parts for machine tools, such as spindle motor or ball screws. On the other hand, GILDEMEISTER is particularly strong in European countries and has a direct sales system in 16 other countries. While both companies sell a wide range of machine tools, GILDEMEISTER stands out with its 5-axis machining centers and large milling centers, as well as their low-budget machines.
Mori Seiki and GILDEMEISTER are not only complementary to each other in terms of regions but also products. It is only natural that both companies benefit through a variety of synergies.
For the above reasons, the two companies have decided to engage in a business and capital alliance to further increase their respective corporate values.
Contents of the business collaboration
The parties are planning business collaboration particularly in the areas of: 1) Production 2) Purchasing 3) Machine developing 4) Sales and services. To realize the synergies, reciprocal representation in equivalent is planned.
In November, 2009, President Mori became a member of GILDEMEISTER's Supervisory Board, and CEO Kapitza of GILDEMEISTER assumed the post of Senior Executive Operating Director of Mori Seiki based on the formalities required under German law. In addition, a steering committee comprised of the top management of both companies was established to appropriately manage the progress of the business collaboration and its synergistic effects.
Details of the capital collaboration
Since a stable relationship of trust between the two companies is important, we signed both the Memorandum Of Understanding (MOU) and the Share Subscription Agreement (SSA) on the same date. As a result of these agreements Mori Seiki accepted 2,279,500 new common shares allocated to a third party by GILDEMEISTER on 7th April, 2009 (after this third party allocation and capital increase, we have 5.0% of the voting rights), and on the same date we became the leading shareholder in GILDEMEISTER. As of the end of March 2010, GILDEMEISTER acquired 4,427,400 of Mori Seiki's common shares (giving 4.00% of the voting rights), making the company our third largest shareholder.
Purpose of the capital and business collaboration
Outline of GILDEMEISTER AG
- Company Name
- GILDEMEISTER AG
- Primary Business
- Manufacture and sales of machine tool equipments
- Establishment date
- 1st October, 1870
(Name of company on establishment: Werkzeugmaschinenfabrik GILDEMEISTER & Comme)
- Registered address
- Gildemeisterstr. 60 D-33689 Bielefeld Germany
- Representative
- Rüediger Kapitza, CEO
- Capital
- 118.513 million Euro
- Employees
- 5,450 (consolidated)
Business results (January to December 2009)
- Sales Revenue
- 1,181 million Euro
- Operating Income
- 32 million Euro
- Net Income
- 5 million Euro
- Total Assets
- 1,153 million Euro
Founded in 1870 and headquartered in Germany, this is the world's largest machine tool builder, with overwhelming strength in the European market. In 1994, the company acquired DECKEL MAHO AG and launched into the milling and drilling machine business. In 1999, by acquiring LCTec GmbH (Pfronten), it entered the laser machine tool business. Currently, in addition to the machine tools division, the solar technology division is a rising presence. In recent years the company has launched the DMG ECOLINE series and has entered the market for low-budget machines.
Starting sales and service in selected regions
Beginning July 1, 2009, we started joint sales and service in Thailand, Indonesia, Taiwan and Turkey. We have also started joint sales and service in Australia since December 1, 2009, and in the USA and India since April 1, 2010. In these regions, one company takes responsibility for sales and service activities for the products, regardless of whether they are Mori Seiki or DMG products. The acting company also responds to demands from customers that relate to existing installed machines.
The purpose of the current reorganization of hubs, which is part of the March 2009 business collaboration project, is to coordinate the two companies' technical dominance and strong sales networks, and build a service system that is capable of immediate response, thereby making an even bigger contribution than before to improving the productivity of our customers.
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