Mori Seiki and Gildemeister announce collaboration plans

In announcement dated 23/3/2009, the two companies say they are planning business collaboration, particularly in the areas of: production; purchasing; machine development; and, sales and service. The two companies together have annual sales in excess of more than €3 billion. Mori Seiki had a stated sales revenue for the period Q4 2007 to Q3 2008 of ¥202,260 million (€1,326 million at ¥152.5 = €1); Gildemeister AG stated sales revenue for the period January to December 2008 was €1,904 million. In driving this relationship, the top men from each organisation will be represented at high level within the other's organisation. So, Mori Seiki president Dr Masahiko Mori will become a member of Gildemeister's supervisory board, while Gildemeister chief executive Dr Rüdiger Kapitza will become senior operating director of Mori Seiki this year. In addition, a steering committee will be set up to manage and evaluate progress of this new relationship and initiative; both Dr Mori and Dr Kapitza will be part of this committee. Furthermore, there will be a cross-shareholding established between the two companies. Mori Seiki will subscribe, until April 2, 2009, to 2,279,500 new Gildemeister Common Shares for €18,076,435, representing 5.0 per cent of Gildemeister's issued and outstanding share capital. The German machine tool builder will issue the shares by way of a capital increase. The date for the issue is set at 15 April. In response, Gildemeister plans to acquire up to 4,426,000 Mori Seiki shares, representing 5.0 per cent of Mori Seiki's issued and outstanding share capital. As of 23 March 2009, it had acquired 2,000,000 Mori Seiki shares. In the announcement, the two companies say that: "Mori Seiki and Gildemeister are not only complementary to each other in terms of regions but also products". Mori Seiki, for example, has a "sound sales result in Japan and USA, and is specially known for its multi-axis turning centres, machining centres and the lathe line". Mori Seiki has a policy of vertical integration and produces main parts for its machine tools, such as spindle motor and ballscrews. Gildemeister, says the statement: "is particularly strong in European countries and has a direct sales system in 16 other countries," adding that while both companies sell a wide range of machine tools, Gildemeister is particularly strong in the 5-axis machining centres and large milling centres product area, while it also has a budget machine line, Ecoline.