OSAKA -- Electronics maker Kyocera is seeking to acquire the power tool business of fellow Japanese company Ryobi for about 15 billion yen ($136 million) to makes further inroads in the growing field, with the aim of inking a deal in the current fiscal year that ends March 31.
Ryobi's power tool sales are believed to reach almost 20 billion yen annually, making it the third-largest player in Japan after Makita and Hitachi Koki. Ryobi is particularly well known for its power drills and saws. Kyocera aims to expand its product lineup and sales network with the acquisition, which would include a Ryobi plant in Dalian, China.
The world's power tool market is growing at a 3.9% annual clip, and is expected to be worth $30 billion by 2021, according to U.S.-based Freedonia Group. Emerging economies in Asia are key drivers of the trend.
Kyocera's mainstay business in ceramic products has enjoyed strong demand for smartphone-related parts, among others, but is still vulnerable to macroeconomic factors. The Kyoto-based company has also closed and streamlined factories under its flagging solar battery and mobile phone businesses. The company is now looking to diversify, particularly into the power tool field, and announced in June that it had agreed to acquire a key American player. It aims to expand group sales by about 500 billion yen to 2 trillion yen in fiscal 2020.