Dr Ruediger Kapitza, CEO of DMG Mori Seiki AG, also announced that the German company had hit its targets for 2014 calendar year announced in October (€2.3 billion, sales of about €2.2 billion and EBIT profit of €175 million). "That is record order intake, record turnover, record results," he said, adding: "This is the best result in our 143-year history, and I am really very proud of that." He said that more information would be released in the financial press conference in March.
By that point, the combined centre of gravity of the whole group may have shifted to Japan. Starting in mid-February, DMG Mori Seiki Co (the Japanese company) will offer €27.50 per public share, with an intention to acquire 50% of company shares, up from the 26.5% it currently holds.
Kapitza explained the rationale behind the move to bring the two companies even closer together. "50% is important. Why? We're going to reach so many different topics; CELOS [a common CNC operator interface], joint IT, and we're now really digging into things; we have to somehow hedge our efforts, because once our IT systems are together you can't separate them anymore."
He said that the companies have been seeking a way to merge for several years, following their cooperation that started in 2009, and considered several other methods before choosing this one. They considered establishing a new joint company and moving both operations into it, but several million Euros in transaction costs and the different shareholder laws in Germany and Japan created huge uncertainties that threatened the viability of the action. The pair also considered the German company taking over the Japanese one, but rejected it because it owns so little of the Japanese company – 9.6% - and because of German banking regulations, which were found to be less friendly than those in Japan.
So the only real surprise has been the timing; the merger had been scheduled to occur by 2020. It was changed to take advantage of favourable low interest rates, as finance is required to support the share purchase. Dr Masahiko Mori, CEO of DMG Mori Seiki Co, said: "I don't want to borrow from the bank, but I have to; I want to minimise the money [cost] for the sustainability of the two groups coming together."
Mori said that the offer price was chosen to be fair to company stakeholders, not day traders. "I have no responsibility to [short-term] shareholders. I have a responsibility for my customers, employees, and long-term shareholders [such as] typical German people, who have been shareholders in Gildemeister over the last 20 years. The average purchase price of the shares has been less than €15; that is why I offered €27.50. It is still a high price for me, but we have to show respect for the long-term shareholders." He said later that he would not raise the offer price; the share value rose above it after news of the plan emerged in the last few weeks.
During the press conference, Kapitza strongly denied that DMG Mori AG would lose its identity as a result of the takeover. "We have to face global challenges and look to the future. A lot of people talk about globalisation, but hardly anybody is truly global." He added: "Mori is also a name that is known, at Bielefeld [northern Germany, location of the Gildemeister plant] and elsewhere. Employees will see that they have safe jobs now, and in the future. They will also see that we are strong." And he added later: "Just hankering after the past, personal emotions, is not businesslike."
Although DMG Mori AG will post record results for 2014, Kapitza said that this performance is unlikely to be repeated in 2015, owing to global volatility. For example, the fall in the value of the Russian rouble, the Swiss franc and the Danish krone, and uncertainty relating to the European and American embargo on Russia over eastern Ukraine. However, in the latter part of the year, the company is planning to open an Ecoline machine assembly factory in Ulyanovsk, southeast of Moscow, which will offset some of the currency issues in the case of Russia.
But although this share offer is headline news, the purpose of the annual event in Pfronten is about machine tool technology and related developments. And a record 7,000 visitors make the pilgrimage to the town in the south of Bavaria to view this. They were not disappointed: DMG Mori had four world machine premieres:
-DMU 100 P duoBLOCK and DMC 125 FD duoBLOCK. These two fourth-generation 5-axis milling machines are now 30% more rigid, partly through strengthened components; 30% more accurate, partly through extra cooling, and feature a new wheel-type modular tool magazine. DMU 100 P travel is 1,000 by 1,250 by 1,000 mm. The DMC 125 FD turn-mill machine has travels of 1,250 by 1,250 by 1,000.
-DMU 270 U has a 50% greater traverse (2,700 mm) and 30% greater longitudinal (2,700 mm) and vertical (1,600 mm) travels than the previous DMC 210 U. It has a new design B-axis milling head that boasts wider swivel, from 210 to 250 degrees, and this works with a more rigid and more accurate NC rotary table (maximum speed 14 rpm).
-CTX beta 1250 TC lathe, now in its second generation and with swing capacity of 500 mm and length 1,210 mm. It boasts a longer Y-axis stroke and shorter compactMASTER spindle that offers 170 mm of machining space. Energy consumption has been reduced by 25%, too.
DMG Mori also had two European premieres:
-NZX 4000 4-axis turning centre, which includes Y-axis and servo-motor controlled turret milling, intended for long workpieces having large diameters. Three spindle bores are available: 145, 185 and 285 mm.
-NRX 2000 double-spindle turning centre has two eight-position disc-type turrets. And its integrated loading and unloading gantry system has a part changing time of 4.2 sec, while the Duo loading unit enables fast workpiece transfer between spindles. Workpiece capacity is 180 mm diameter by 100 mm long.
From April 2015, DMG Mori will launch four new software-based productivity tools for its Celos CNC machine operating system: Service Agent, which supports predictive maintenance; Tool Handling, which aims to reduce tool set-up times by creating loading and unloading lists; Job Scheduler, which plans production; and Messenger, which gives an overview of machine status. A desktop computer version of the software will also be available.
