The European Commission announced in a press release on 12 April that it had approved Nidec’s acquisition of Embraco.

The approval, however, is dependent on Nidec divesting its parts of its refrigeration compressor business where overlap exists between Nidec and Embraco in the markets where the Commission had identified competition concerns.

In the statement, the Commission stated that, “Nidec offered to divest its refrigeration compressor business for both household and light commercial applications”.

“This includes plants in Austria, Slovakia and China and removes the entire overlap between Nidec and Embraco in the markets where the Commission had identified competition concerns,” it continued.

In addition, Nidec has committed to “make available to the purchaser of the divestment business significant funding for future investments in the facilities,” the statement read.

“This funding is dedicated to investments in production lines in Nidec’s plants in Austria and Slovakia. The Commission considers that this will ensure the future viability and competitiveness of the Austrian and Slovak plants.”

The Commission’s decision to approve the acquisition, the statement concludes, is conditional on full compliance with these commitments.

“The Commission has formally approved the commitments offered by Nidec to clear the transaction,” a source familiar with the dossier told this website. “However, an upfront buyer is requested.”

“Nidec has to sell the commitments first, and only then take over Embraco,” the source said. 

In November 2018, the European Commission announced an “in-depth investigation” into the deal on the grounds that it could create an unfair marketplace for light-commercial compressors.

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