Minebea and the Development Bank of Japan (DBJ) recently reached an agreement to setup an M&A Framework under which we will allocate convertible bonds (CBs) to DBJ. The deal enables us to leverage DBJ's strengths and make the most of any M&A opportunities that appear on the horizon.
Under our old Medium-term Business Plan, growth of the Machined Components Business relied on ball bearings and pivot assemblies. While that strategy may have reflected the market outlook from just a couple of years ago, when it looked like HDDs would grow at an annual double-digit pace, the current reality is quite different. We have been forced to rethink our growth strategy for machined components in light of the present pace of slow that is predicted to continue into the future.
The current trends in foreign exchange rates have also presented us with a rare opportunity for overseas M&As. In light of these developments we have reached the conclusion that we should return to our roots and once again incorporate overseas M&As into our growth strategy for the Machined Components Business.
While we don't have anything specific in mind, there are a number of excellent machined component manufacturers owned by investment funds in both Europe and the U.S. that we believe could be acquired through M&A for over 10 billion yen and some for around 50 billion yen if feasible. Up until now, we have spent conservatively on fixing our weaker businesses but from now on we intend to make larger investments that will cultivate the growth of the Machined Components Business over the long run.
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