Essex Magnet Wire and Furukawa Electric Co., Ltd. have reached agreement on the framework of a joint venture that will combine nearly all their magnet wire operations into a single global powerhouse. A key motivation is to create a single brand that can serve the automotive industry’s growing need for magnet wire to electrify its power trains at manufacturing plants spread around the world.
The deal was jointly announced on September 27 in the US by Brian Kim, shown at left, CEO of Superior Essex which is based in Atlanta, and on September 26 in Japan by Kei Kobayashi, right, president of Furukawa Electric which is based in Tokyo.
As predicted in an earlier article in Magnetics Magazine when the negotiations began, the joint venture will expand upon a previous partnership with the European operations of the companies. Upon execution of the definitive agreements and regulatory and other approvals, the companies plan to combine their magnet wire business operations over the next several months to create a new entity that will operate as Essex Furukawa Magnet Wire, LLC, using the “Essex Furukawa” brand.
All Essex global magnet wire locations except Essex Italy will be part of Essex Furukawa, as will Furukawa’s magnet wire plants in Japan and Malaysia. Furukawa characterized the transaction as a company split and investment in kind designed to meet a strong demand for a global supply of magnet wire products of consistent quality and design, especially for automotive manufacturers. Furukawa said it anticipates closing the transaction by April 2020.
Other Superior Essex business units that will remain under its umbrella and not be included in the joint venture are Superior Essex International which makes telecom cable and other communications products, Essex Brownell which is a global distributor of magnet wire, Hi-Wire which is a distributor of magnet wire and motor repair products in the UK, and IVA Solutions (France and China) which manufactures wire enamels.
“Today is an exciting day, not only due to the announcement of the Essex Furukawa deal, but also as it marks the creation of a technological powerhouse in the magnet wire industry that can service many of the leading enterprises,” said Kim.
“As a singular entity — and relying on the strengths of both Essex Magnet Wire and Furukawa Electric — we will be able to draw on more than two centuries of combined experience and knowledge to push the boundaries of innovation while remaining focused on delivering manufacturing excellence, technological advancement, and outstanding customer service.”
The new venture will have market leadership positions in North America, Europe, and Asia, increased rod and foundry resources and be able to expedite research and development advancements especially for electric vehicle markets, said Kim. The combined resources amount to nearly 2,100 employees working at 17 locations in eight countries.