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The eBearing News
July 25, 2006
NTN Completes SNR Investment Strategy
copyright © 2006 eBearing Inc.
NTN Inc. (Japan; TSE:
6472)
announced it has reached agreement with Renault SAS (France; PSE:
RNO)
on a phased plan to gradually acquire SNR Roulements, the bearing
manufacturing division of Renault.
In January, eBearing presented a highly detailed background of the two businesses, SNR's position and
the acquisition efforts to date:
article: NTN moves to acquire SNR
SNR (Societe Nouvelle de Roulements, or the New Bearing Company) is the world's seventh-largest
bearing manufacturer, supplying the automotive, industrial and aerospace industries. The company has
five plants in
France: Annecy, the headquarters; Argonay (high precision bearings); Meythet (roller
bearings); Seynod (rolling elements, ball bearings, clutch release bearings, thrust
bearings); Ales (ball bearings, automotive wheel hub bearings. And five plants in other
countries: Bielefeld, Germany (linear guides); Curitiba, Brazil (ball bearings, tapered
roller bearings); Turin, Italy (spherical roller bearings); Sibiu, Romania (standard ball
and roller bearings); Atlanta, Georgia, USA (aerospace bearing maintenance).
After initially proposing a simple one-step acquisition, NTN's takeover has now been modified
to a phased plan, reportedly in hopes of forestalling critics in the EU, France, and even within SNR itself.
The acquisition should proceed as follows:
1. Late October 2006 - NTN acquires initial ownership of 35%
2. Late October 2007 - NTN acquires ownership stake totaling 51%
3. Between October 2008 and 2010 - NTN acquires ownership stake totaling 80%
The phased-in ownership strategy neatly disarms many critics of the deal, who now lack a
specific point of reference for dominant NTN influence and/or dominant NTN ownership.
Complaints about a minority investor are unlikely to gain traction, while the advent of 51%
ownership would lack impact, coming a year later and on the heels of the existing 35% ownership.
Finally, the long lead time to 80% ownership would sap the resources and resolve of any remaining
opponents, particularly once 51% ownership is established.
The promise that Renault will retain at least 20% ownership may be enough to appease the most
vocal critics, particularly those to feared losing access to Renault's generous social safety
net, benefits and work schedules.
As soon as it was announced, NTN's potential involvement in SNR generated a high level of
concern, particularly from employees.
Their distaste and mistrust for the likely NTN takeover has been fueled by both
organizations' poorly considered refusal to keep workers and management informed.
That mistrust and frustration culminated recently in a mid-June massive walkout of
workers and management from SNR's Annecy headquarters.
article: SNR workers walk out to protest NTN takeover
Automaker Renault, facing difficult times, is restructuring and reorienting many of its far-flung
business operations. SNR is one of the businesses being restructured; NTN in fact walked away from a mid-2005
bid to acquire SNR, before being lured back for more talks. In October 2005, SNR divested its
ball production to NN Inc. (USA).
article: SNR divests ball production to NN
Announcing the final acquisition form, NTN outlined the expected synergies:
• improve NTN's market by capitalizing on SNR's market presence in Europe and France
• expand NTN's business and improve competitiveness by capitalizing on SNR's areas of technical
excellence and innovation, including sensors and other technologies
• combine productivity, quality, and technology to enhance market opportunities and improve
efficiency; leverage production bases in Europe, Romania, Brazil and other key markets; combine R&D
resources; and give employees and their expertise the opportunity to move between organizations
• improve new product development speed by integrating and leveraging technologies
and experience, particularly as it applies to the auto parts business; also grow the whole business
in a more competitive atmosphere, following market demands for modularity and compact design,
reinforcing the partnership with Renault
NTN and Renault have an established joint venture relationship, manufacturing CV joints in France
since 1998. Now, with the SNR buyout, Renault will have a closer relationship with NTN than any other
ball and roller bearing manufacturer. NTN said it hopes to build on that and have the opportunity
to supply Renault with a wider range of NTN automotive bearings.
Finally, NTN said it expects to benefit from SNR's strong European presence, particularly by using
SNR's R&D and market access resources in Europe. Meanwhile, it will leverage its own resources to
bring SNR bearings into more world market opportunities.
Map of the combined NTN and SNR facilities across Europe:
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NTN and SNR facilities in Europe
(courtesy NTN)
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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