Nidec poses new-old test for Japanese buyouts

KKR & Co

02/10/2026 13:00

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.
By Hudson Lockett
HONG KONG,  Oct 2 (Reuters Breakingviews) - Japan Inc is having a déjà vu moment. The embattled $16 billion precision motor maker Nidec 6594.T risks being booted off the Tokyo stock exchange, presenting an opening for private equity to swoop in and right the ship. Yet while foreign buyout shops no doubt recall how a similarly complex situation at Toshiba became a nightmare slog, success with Nidec would represent a major step forward in Japan Inc’s governance push.
In the latest twist of a years-long accounting fiasco, new CEO Michio Kaida on Thursday said Nidec was still seeking its auditor PwC's signoff for its delayed results even after recognising 1.1 trillion yen ($7 billion) in write-downs this week, of which some 480 billion yen were related to accounting irregularities. For years, founder Shigenobu Nagamori demanded every one of the group’s 350-plus subsidiaries achieve a 10% operating margin and, when they tried to mask failures on this front, sought to hide internal suspicions of accounting fraud from PwC. In February, Nagamori stepped down as chair emeritus.
Nidec is hurtling toward a forced delisting as it looks unlikely the firm can resolve its accounting and other issues by an October 28 deadline; the shares have plummeted 27% this week alone.
The crisis is reminiscent of Toshiba, which following a 2015 accounting scandal became a high-profile target of hedge funds and activists including Elliott Management and Third Point. Indeed, Seth Fischer's Oasis Management has built up an almost 8% stake in Nidec, citing its "technological leadership in the motor industry, its broad customer base, and its extensive global operations".
Yet whether private-equity groups like Bain and KKR KKR.N — which possess the necessary scale and restructuring acumen in Japan — are tempted to launch a take-private deal will reveal a lot about the state of corporate governance and M&A in the country. Here, Toshiba's tortuous journey counsels caution. Ultimately, the interested foreign parties had to give way to a domestic consortium of some 20 buyers after Toshiba was deemed too strategic to sell to outsiders.
     Any bet on turning Nidec around must grapple with the possibility that Tokyo will recognise some of its many subsidiaries as strategically important. And private equity groups may be wary of it as an export-focused company. Yet it’s that same importance that ought to counsel the government to back a take-private deal. At this point leaving the world’s biggest precision motor maker to its own dysfunctional devices looks like a recipe for far worse than anything foreign ownership could serve up.
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CONTEXT NEWS
Japan's Nidec’s new CEO Michio Kaida said at a press conference on October 1 that the firm is still seeking auditor signoff from PwC for its delayed results as it grapples with an accounting scandal. The signoff is needed to remove a special alert designation from Nidec's stock, which could result in delisting if not resolved by October 28.
The precision motor maker on September 30 announced it had booked about 1.1 trillion yen ($7 billion) in write-downs, including 632 billion yen for the fiscal year ending in March 2026. However, PwC said it was unable to provide an opinion on Nidec’s earnings due to continued inappropriate booking of fixed and other costs, among other issues, and that it could not verify whether the impairment losses as booked are sufficient.
Shares in Nidec have fallen about 27% after Japanese financial magazine Diamond first reported on September 28 that its board had decided to recognise a 1 trillion yen impairment charge and remove then-CEO Mitsuya Kishida, whose resignation was confirmed on September 29.

(Editing by Robyn Mak; Production by Aditya Srivastav)
((For previous columns by the author, Reuters customers can click on LOCKETT/ hudson.lockett@thomsonreuters.com))