1. Mitsubishi Electric will acquire Nozomi Networks for operational technology security. 2. The acquisition supports Mitsubishi's security expansion in vital sectors. 3. Nozomi will be a subsidiary post-transaction completion in 2025. 4. Increasing OT security demand is driven by IoT and digital transformation.
Acquisitions typically lead to market optimism. Past acquisitions like ON Semiconductor's purchase of Cavendish Kinetics boosted stock value due to strategic growth.
Acquisition enhances Mitsubishi Electric's market position in a growing sector, influencing investor sentiment positively.
The investment will take time to integrate and see returns, impacting long-term growth.
Mitsubishi Electric Corporation (TYO:6503) announced today that it has entered into an agreement to acquire all shares of Nozomi Networks Inc., a U.S.-based developer and distributor of operational technology (OT) security solutions. Nozomi Networks serves a diverse range of customers, primarily in social infrastructure sectors such as power and railways, as well as in the manufacturing industry. This acquisition pertains to shares not already owned by Mitsubishi Electric.
The transaction is expected to be completed in 2025, subject to the approval of the necessary regulatory authorities and the fulfillment of other customary conditions.
Upon completion of the transaction, Nozomi Networks will become a wholly owned subsidiary of Mitsubishi Electric.
Rationale for the Transaction
In response to the increasing importance of OT security measures due to the IoT and digital transformation (DX) of manufacturing sites and social infrastructure, Mitsubishi Electric has been dedicated to developing a "One-Stop OT Security Solution" that protects on-site equipment and systems from cyberattacks. This initiative leverages its extensive IT security expertise gained across various sectors, including the financial industry, and aims to promote DX among multiple industries.
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