Acquiring NKT Photonics of Denmark: expanding into lasers and fibre optics (2022)

Can bought technology become a pillar?

To see this acquisition as one more move in a diversification programme is to miss what it was. Hamamatsu Photonics held a roughly 90% world share in photomultiplier tubes, and that strength was also a lopsidedness: it was concentrated entirely in the technology of detecting light. Taking in NKT Photonics’ SuperK and Koheras lines was a choice to acquire the emitting side of the field — together with its European base — and to stand as a company that could supply both detection and emission. The figure of some ¥42 billion looks like the price of buying, with money, the time it would have taken to fill that gap in-house.

Whether what was bought grows into a pillar, however, was not settled at this point. The Danish government rejected the deal once, and fourteen months passed before completion — a reminder of how heavy cross-border acquisitions become in an age when optical technology falls under national security. Completion coincided with the period in which the draining away of pandemic demand cut operating profit by about 43%, so the appearance of the investment in earnings was pushed further out. The quality of an acquisition is measured not at the moment of purchase but in how different technologies and organisations are subsequently bound together.