(Bloomberg) -- Japan’s Nidec Corp. and private equity firm KPS Capital Partners are competing to acquire Siemens AG’s Innomotics large motors business, which could fetch about €3 billion ($3.3 billion) in a sale, according to people familiar with the matter.

The suitors have been invited to make second-round bids for Innomotics, the people said, declining to be identified because the information is private. 

Kyoto-based Nidec, a maker of precision and automotive motors, is perceived as a natural buyer for the Siemens unit. New York-based KPS is known in Germany for the acquisition of Thyssenkrupp AG’s Waupaca iron foundry in 2012 and the subsequent sale to Hitachi Metals Ltd. It wasn’t immediately clear if other suitors remain.

Deliberations are ongoing, and there’s no certainty they will lead to a transaction. Representatives for Siemens and KPS declined to comment, while a representative for Nidec couldn’t comment on the matter.

Shares in Nidec dropped as much as 3.2%, the most in seven weeks, following the Bloomberg News report. It would be the biggest deal for the Japanese company if it succeeds in acquiring Innomotics, according to data compiled by Bloomberg. Nidec has a market value of about $22 billion.

Siemens rose 0.5% to €181.60 at 9:04 a.m. in Frankfurt.

Innomotics, which makes heavy-duty electric motors used in ships and mining equipment, generates earnings before interest, taxes, depreciation and amortization of €300 million to €400 million a year, people familiar with the matter told Bloomberg News earlier.

Siemens last year carved out Innomotics as a legally separate business and has said it plans to list the company on the stock market or sell it. Goldman Sachs Group Inc. and BNP Paribas SA are advising Siemens on options for the business, the people said. A representative for Goldman Sachs declined to comment.

Selling the unit would mark a big step for Siemens’s revamp, in which the company has exited heavy-equipment businesses and moved toward higher-margin, software-driven product lines to catch up to the profitability levels of rivals.

It has offloaded most of the smaller divisions destined for divestment, alongside spinoffs of businesses like gas turbine maker Siemens Energy and health-care equipment maker Siemens Healthineers AG. 

For Nidec, the acquisition would mark a major deal at a time when the company’s billionaire founder, Chief Executive Officer Shigenobu Nagamori, is handing over to Mitsuya Kishida. The incoming CEO will lead Nidec’s nascent push into electric-vehicle motors.

--With assistance from Ryan Gould and Yuki Furukawa.

(Updates to add Siemens share move in sixth paragraph.)

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