NEC M&A Fails to Seek GE Cooperation in IoT Business Transfer Station

The Internet of Things (IoT) has become the focus of global IT vendors' development, and companies related to the Internet of Things business are more likely to be favored by investors in 2017, but NEC, one of Japan's largest IT factories, has become an exception, due to its failure overseas. Mergers and acquisitions; NEC now emphasizes its cooperation with GE and strengthens the Predix marketing system for the exotic Internet of Things platform in the hope of stimulating business growth.

The reason NEC was seen as bad is that the plant's three-year mid-term business plan for the 2016-2018 fiscal year (2016/4-2019/3) clearly states that it is necessary to purchase and develop externally, but the 2016 fiscal year will fail to reach a plan. 2017 fiscal year and important acquisitions occurred defeat, now being recast medium-term management plan, the outside world is concerned about whether NEC will announce a new medium-term management plan in January 2018.

The biggest impact on the market sentiment was the acquisition of British software company Civica by NEC in the summer of 2017. Since Civica has a solid customer base, especially related to local governments, it is conducive to the promotion of NEC face recognition systems. Therefore NEC actively promoting mergers and acquisitions, and to that end the sale of ways, such as Renesas Electronics (RenesasElectronics) holding hands, etc., to raise about 100 billion yen (about US $ 880 million).

However, NEC has failed to compete with its rivals and Swiss investment partners Partners has invested more than 150 billion yen. NEC said that for 2016 companies with a revenue of approximately 40 billion yen and a pre-tax net profit of approximately 8 billion yen, Partners’ The bid is too high.

The Nikkei website reported that Fujitsu executives, who are also IT giants in Japan, stated that high prices are natural for mergers and acquisitions between IT factories. It is only after such mergers and acquisitions that it takes longer to recoup investment. . Now that Fujitsu is undergoing a relatively thorough organizational transformation, its performance is better than that of the rebuilt NEC. However, for large-scale mergers and acquisitions, it is still expected and fearful.

Although the performance is poor, conservative management is better, but Sato Wenzo, a well-known Japanese industrial analyst, said that Japanese companies are developing too slowly in the area of ​​Internet of things and artificial intelligence (AI). They must catch up with foreign companies and promote mergers and acquisitions is a shortcut. .

Now that NEC has failed to purchase, it can only look for the next opportunity. Prior to that, it chose to cooperate with international giants and cultivate the company's internal Predix certified personnel, from 100 in 2017 to 500 in 2020. It is a prudent approach to develop its own business based on the platform of large international companies and expand support for customers.

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