Carlyle Group Inc (CG.US) is in talks with Japanese industrial gear supplier Makino Milling Machine Co. about acquiring the company.

Four informed sources revealed that the private equity giant Carlyle Group Inc. (CG.US) is in negotiations with industrial gear supplier Makino Milling Machine in Japan to become a potential white knight buyer to counter Nidec's hostile takeover bid of $1.81 billion. Three sources stated that it is currently unclear whether Carlyle Group Inc. will make a formal offer. The battle to privatize this machine tool manufacturer is heating up, with Nidec offering a takeover bid of 11,000 yen per share (approximately $77.30) on April 4th. Makino Milling Machine's board approved a "poison pill" defense plan last week. The bid values Makino at 257 billion yen. According to the three sources, Carlyle Group Inc, MBK Partners, and the Nippon Sangyo Suishin Kiko Group (NSSK) have shown interest in Makino Milling Machine, but NSSK has withdrawn from the bidding. One source mentioned that Carlyle Group Inc. has become more cautious since the announcement of increased tariffs in the United States. This competition highlights the intensifying merger and acquisition environment in Japan. Bidding without prior contact as Nidec did is rare. Nidec filed for an injunction on Wednesday to block the "poison pill" plan - providing existing shareholders with free stock options to dilute Nidec's ownership and hinder the acquisition. Makino Milling Machine requested shareholders not to tender their shares to Nidec, citing ongoing negotiations with potential white knight bidders that did not leave shareholders enough time to make a decision at this stage. This deal comes at a time when Japanese authorities are actively promoting M&A deals. The Ministry of Economy, Trade and Industry in Japan released guidelines in 2023 to combat takeover defense tactics and stated the need to consider credible offers appropriately. The guidelines also mentioned that adopting poison pill measures is appropriate if an acquisition would harm the company's value and shareholders' common interests. The stock issuance still needs to be proposed as a shareholder proposal at the Makino annual shareholders' meeting scheduled for June. Nidec's Chief M&A Officer, Takamitsu Araki, stated, "Makino's response is a typical reaction of Japanese companies being targeted by buyers. Our ultimate goal is to increase enterprise value and create jobs. We are completely strategic."