Electronic powerhouses to pool resources, create new company later this year
Reeling camera firm Olympus has received a $645 million investment from Japanese technology giant, Sony.
Tech companies Sony and Olympus have agreed to a partnership.
In exchange for the investment, Sony will receive 34 million shares in Olympus and take an 11.5% stake in the company.
Good timing for both companies
Olympus has had a bit of a rough go recently, as they’ve been dealing with losses suffered from a rather large accounting scandal: Former Olympus chairman Tsuyoshi Kikukawa has pleaded guilty to charges of falsifying accounts, having covered up $1.7 billion in company losses. The scandal was revealed by Michael Woodford, the company’s British former chief executive, who was dismissed when he challenged Mr. Kikukawa and the board over some oddly large payments related to acquisitions.
Sony, meanwhile, has reported losses for four straight years now. The two companies see this partnership as opportunity to implement a turnaround strategy.
Specifically, they will set up a company later in the year that focuses on medical equipment, an area of technology that Olympus specializes in (in addition to cameras). It will be 51% owned by Sony, and will focus on the development of new medical equipment not possible by Olympus alone, including devices like endoscopes used in keyhole surgery (side note: Olympus controls close to 70% of the world’s endoscope market, hence the reference).
“As part of our strategic initiatives announced in April 2012, at Sony we are aggressively pursuing the growth of our medical business, with the aim of developing it into a key pillar of our overall business portfolio,” said Sony’s Chief Executive Kazuo Hirai.
Hiroyuki Sasa, the Representative Director and President of Olympus, said “Partnering with Sony will provide great advantage to Olympus and enable the two companies to exchange various complementary competencies. Investment from Sony will help strengthen our financial base. In addition, through this alliance, the strengths of the two companies will merge, certainly making it possible for Olympus to contribute to world medical progress by developing a variety of new medical devices that would not be possible by Olympus alone. In the field of digital cameras, we will seek to achieve collaboration in a manner that further improves the competitiveness of the two companies.”
For more information on this partnership, visit sony.net ■
Story via: bbc.co.uk
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