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Business deals

Kyocera hedges trade war risks with 2 European acquisitions

German and Dutch deals provide bases outside Japan and US

Kyocera is looking to strengthen European operations as the U.S.-China trade war increases uncertainty. (Photo by Kosaku Mimura)

OSAKA -- Japanese electronics supplier Kyocera said Monday that it will buy two European companies as it aims to limit exposure to the U.S.-China trade war by gaining production and sales bases on the continent.

The Kyoto-based company will acquire Germany's H.C. Starck Ceramics and Dutch pneumatic tool maker Van Aerden Group. The purchase prices were not disclosed, but the total value of both deals is estimated at just under 20 billion yen ($182 million).

Most of Kyocera's factories are concentrated in the U.S. and Japan. The two European deals will diversify the company's production bases and help strengthen business lines beyond electronics.

Like Kyocera, H.C. Starck has strength in ceramic components for semiconductor manufacturing equipment and industrial machinery. Van Aerden is known for nailers used in construction and will bolster Kyocera's supply of tools in Europe.

Kyocera aims to buy all of H.C. Starck from its parent company as early as April, and to complete the Van Aerden acquisition as soon as this month in a deal with the Dutch company's founding family.

Kyocera is struggling as orders drop for smartphone components, while sales in its solar power generation business miss expectations. Last week, the company cut its operating profit forecast for the year ending March 31, projecting a 16% decline to 76 billion yen instead of a 9% gain. The sales forecast was lowered by 50 billion yen to 1.6 trillion yen.

Aiming for sales of 2 trillion yen in fiscal 2020, the Apple supplier plans to boost earnings by diversifying its businesses and sales channels through more small and midsize acquisitions.

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