JVC, Kenwood in capital tie-up
Wednesday, July 25, 2007
JAPAN'S struggling electronics maker JVC has agreed to a capital tie-up with audio equipment maker Kenwood Corp and the two companies said yesterday they would consider integrating their operations.
As part of the agreement, JVC, which is 52.4 per cent owned by Matsushita Electric Industrial Co Ltd, will issue a total ¥35 billion ($438.024 million) worth of new shares to Kenwood and Kenwood's top shareholder Sparx Group.
Kenwood will buy ¥20 billion worth of JVC shares, taking a 17 per cent stake in the Yokohama-based company, while Sparx will buy ¥15 billion worth of shares, acquiring a 12.8 per cent stake.
The new share issue will lower Matsushita's stake to 36.8 per cent.
Matsushita, the world's largest consumer electronics maker, has been trying to reduce its JVC stake, worth about ¥50 billion, because its persistent losses have been weighing on group-based earnings.
Shares in Victor Co of Japan Ltd (JVC) closed up 5.5 per cent at ¥381 ahead of the announcement, while Matsushita shares gained 1.3 per cent to ¥2,370 and Kenwood rose 0.6 per cent to ¥178. The Nikkei average was up 0.21 per cent.
Although JVC enjoys strong demand for hard disk drive-equipped camcorders, its rear-projection television sales have been hit by sharp falls in plasma TV prices.
It is also struggling to compete with industry titans such as Sony Corp and Samsung Electronics Co Ltd in the liquid crystal display (LCD) TV market.
After the market close yesterday, JVC lowered its group net forecast for the year to March 2008 to a loss of ¥17.2 billion from a ¥10.5 billion loss, due in part to sluggish LCD TV sales in the domestic market.
Reuters
As part of the agreement, JVC, which is 52.4 per cent owned by Matsushita Electric Industrial Co Ltd, will issue a total ¥35 billion ($438.024 million) worth of new shares to Kenwood and Kenwood's top shareholder Sparx Group.
Kenwood will buy ¥20 billion worth of JVC shares, taking a 17 per cent stake in the Yokohama-based company, while Sparx will buy ¥15 billion worth of shares, acquiring a 12.8 per cent stake.
The new share issue will lower Matsushita's stake to 36.8 per cent.
Matsushita, the world's largest consumer electronics maker, has been trying to reduce its JVC stake, worth about ¥50 billion, because its persistent losses have been weighing on group-based earnings.
Shares in Victor Co of Japan Ltd (JVC) closed up 5.5 per cent at ¥381 ahead of the announcement, while Matsushita shares gained 1.3 per cent to ¥2,370 and Kenwood rose 0.6 per cent to ¥178. The Nikkei average was up 0.21 per cent.
Although JVC enjoys strong demand for hard disk drive-equipped camcorders, its rear-projection television sales have been hit by sharp falls in plasma TV prices.
It is also struggling to compete with industry titans such as Sony Corp and Samsung Electronics Co Ltd in the liquid crystal display (LCD) TV market.
After the market close yesterday, JVC lowered its group net forecast for the year to March 2008 to a loss of ¥17.2 billion from a ¥10.5 billion loss, due in part to sluggish LCD TV sales in the domestic market.
Reuters
Business Besides Oil
