Oki Electric Industry Co., Ltd. (TOKYO:6703), a leading telecommunication manufacturer headquartered in Japan, and Itautec, one of the most important Brazilian companies of banking and retail automation, personal and corporate computers and technological services, controlled by ITAÚSA - Investimentos Itaú S.A. (BM&FBOVESPA), the second largest private conglomerate in Brazil, today announce a strategic partnership to jointly operate an automation and services company in Brazil.
The partnership is intended to drive growth to aim for the leading share in the Brazilian ATM and IT markets by capitalizing on OKI's world top-class cash-recycling ATM technologies as well as Itautec's extensive customer base and services network for the maintenance of computers, ATMs and other IT devices, which is the largest such network in Brazil and reaches more than 3,700 cities.
OKI and Itautec have signed an agreement whereby OKI will acquire a 70% stake in a newly established company holding Itautec's Automation and Services division. Itautec will continue to own the remaining 30% stake in the new company. Itautec's personal computer unit is not part of this transaction. The transaction is subject to customary conditions, including regulatory approvals, and is expected to close by the end of December 2013.
OKI developed the world's first cash-recycling ATM in 1982 and in 2011, succeeded in developing an ATM capable of simultaneously handling deposits and withdrawals of mixed banknotes in up to 128 denominations within one unit. Through its long history in manufacturing ATMs, OKI has accumulated the industry's leading mechatronics technology, in addition to development, manufacturing and quality control technologies that allow OKI to manufacture high-quality products with a short lead-time.
OKI identified development of its cash-recycling ATMs in markets outside of Japan as one of OKI's key growth areas. OKI has achieved strong track records in Japan and China, where it holds the leading market share, as well as in Russia and Indonesia. Capitalizing on these achievements, OKI is focused on expanding sales in emerging countries, such as those located in Central and South America, where rapid economic growth is expected.
Itautec's Automation and Services division has a manufacturing facility in Brazil, service sites throughout the country and sales operations in several countries in Latin America and Europe. The division designs, develops, manufactures, sells and maintains automation equipment such as ATMs designed for financial institutions, and other IT equipment. The Automation and Services division holds approximately 30% of the market share in Brazil and is the second largest ATM manufacturer in Brazil. Its leading client is Itaú Unibanco, ITAÚSA's banking subsidiary and the largest private bank in Latin America. In order to further expand their business, they had been looking for a strategic partner with leading-edge technologies.
OKI and Itautec have agreed to cooperate and leverage their respective strengths since the technology and region overlap is relatively low. The partnership will further expand the Automation and Services business into the ATM market in Latin America based on Itautec's solid foundation in Brazil.
"We are delighted to reach an agreement with Itautec," says Hideichi Kawasaki, President of OKI. "The agreement will enable OKI to design, develop and manufacture ATMs as well as to sell and provide maintenance services in Brazil. Moreover, OKI now has a business foothold in Central and South America. Together with Itautec, we plan for further growth in these expanding markets."
"Itautec is pleased with the partnership with OKI since it enables us to provide higher value services to customers and to enhance our capabilities to grow in a sustainable way and broaden our markets, not only with ATMs but also bank branch systems", says Ricardo Setubal, Chairman of Itautec.
Upon completion of the transaction, OKI will build a solid foothold in Brazil with an extensive customer base, in addition to designing, developing, manufacturing, selling and offering maintenance services for ATMs. Moving forward, OKI will accelerate business development in the Latin American ATM market and in turn, aim to expand market share.