1
Merger between Koyo Seiko Co., Ltd.
and Toyoda Machine Works, Ltd.
Merger in 1st of January 2006
2
Background to Merger
1. Establish worldwide network of sales, development and manufacturing bases able to respond speedily and accurately to customers’ needs.
We concluded that merging the two companies to form a leading worldwide systems supplier is the best means of meeting customers’ expectations and gaining their trust in the increasingly competitive auto industry.
2. Secure the technology development capability and resources required to shorten technical innovation lead time and develop complex, large-scale systems.
Regarding steering business, the two companies established FAVESS Co., Ltd. in Nov. 2002 to integrate electric power steering sales and development resources, and this company has steadily achieved results.
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Purpose of MergerT
oyo
da
Mach
ine
Wo
rks
X
社
Creation of new business opportunities through synergy in four business areas
Bearing business
Machine tool business
Drive line business
Steering business
World-level systems supplier
Ko
yo S
eiko
Expand the benefits of integration at FAVESS to all steering business to meet
customers’ needs
Achieve the same synergistic benefit for bearings, machine tools and drive line products
through integration
Total integration
Further development of bearing and machine tool business
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Overall Corporate Goal
Auto parts businesses(steering, bearings, drive line products)
Machine tool business(foundation of manufacturing)
Strong growth
Synergistic effect
To become a company that is known throughout the world and that has the trust, respect, and high expectations of society
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Outline of Merger
◆ Company name : JTEKT Corporation
◆ Date of merger : January 1, 2006
◆ Continuing company : Koyo Seiko
◆ Executives : Chairman: Takaya Yamada (current TMW chairman)
President: Kohshi Yoshida (current Koyo Seiko president)
Vice President: Motohiko Yokoyama (current TWM president)
Other executives will be announced when decided
◆ Location of head office : Osaka, Japan
◆ Merger ratio : 0.76 common shares of Koyo Seiko will be allocated for each common share of Toyoda Machine Works
The two companies will merge as companies on equal footing
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Steering Business Basic Strategy
0 200 400 600
Company E
Company D
Company C
Company B
Company A
New company
20082003
1. Strengthen technology development capability and enhance product lineup through realignment of resources and integration of know-how
2. Strengthen cost competitiveness by utilizing benefits of integration
3. Expand global supply capability and reinforce sales network
Target global share for 2008
Secure leading position within the steering industry
Industry position (sales) (¥1 billion)
New company 30 %
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Steering Product Development
2. Construct global network of development bases◆Network of development bases with advanced development capability has already been established covering Japan, America, and Europe.
Systemization
Hydraulicpower steering
Electricpower steering
Being mass produced
Now under development for mass production
R&Dnow under way
1. Become full system supplier with complete lineup of products
3. Reinforce advanced development
Vehicle motion active control
system
Automaticoperation
control system
Fu
nct
ion
8
Bearing Business Basic Strategy
Top share of global automotive bearing market (17% share)
* Automotive bearings1. Tapered roller bearings: Reinforce position as world’s no.1company in terms of product strength by providing products
clearly differentiated from those of competitors and achieving dramatic cost reductions through the development of innovative technology
2. Hub unit bearings:Enhance advanced development (high functionality) and strengthen global supply network3. Needle roller bearings: Specialize in automotive types (automatic transmission thrust bearings, rocker arm bearings)4. Development of unit products combining bearing and drive line products
◆ Further strengthen automotive and industrial bearing business and achieve synergy through such means as combining bearings with other products to form unit products.
2003 2008
New company17%
Company A 16%
Koyo13%
Company B 14%
Company C 13%
Others44%
Others
Worldwide position (sales)
KOYO 13%
* Industrial bearings1. Steel industry bearings and drive shafts: Utilize strength as holder of no.1 domestic
share to expand overseas business2. Windmill power generator bearings: Utilize experience and high share in Europe to
aim for no.1 position3. Machine tool bearings and EXSEV bearings: Through utilizing synergy and
development of high-precision, high-function products, expand machine tool bearing business and obtain overwhelming global share of special-environment bearings.
Aim for no.1 global position in each field
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120
51
0
50
100
150
'03 '04 '05 '06 '07 '08
Drive Line Business Basic Strategy
Become a world-class supplier of drive line products through strategic global expansion of business
Sales
Fiscal year
1. Regarding intelligent torque controlled couplings (ITCC) and Torsens, which are strong products, expand business globally for the expanding 4WD market.
2. Improve the product strength, particularly the cost competitiveness, of drive shafts through machine tool technology innovation and bearing technology synergy (Japan, ASEAN, China)
(¥1 billion)
Double
Bearing technology
Drive shaft
Driveshaft
Propeller shaft
ITCCTorsen
Hub unit
Hub unit
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Machine Tool Business Basic Strategy
Contribute to the manufacturing operations and business development of customers as a systems supplier with top technology through combining the unique technology of both companies.
・ Utilization of superior bearing and heat-treatment technology ・ Expansion of grinding technology types ・ Integration of control technology
Cutting
Heat-treatment
Grinding
Co
ntro
l
Bearing, heat-treatment technology
0 50 100 150
Company A
Company D
Company E
New Company
Company C
Company B
\1 billion yen
Industry position (2003 sales)
11
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