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Wednesday, May 14, 2008
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JVC, Kenwood to Set Up Joint Holding Company
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Home electronics suppliers Victor Co. of Japan and Kenwood Corp. said Monday they have agreed to combine operations under a holding company that will focus on car and home audio electronics.
The new entity, to be called JVC Kenwood Holdings, will
aim to quadruple operating profit in three years, the
two companies said in a statement. The joint holding
company will be created Oct. 1.
The move is the latest stage of a long-running
combination plan that underscores the pressure for
consolidation as competition intensifies among Japan's
crowded field of small to mid-size consumer device
makers.
An onslaught of South Korean and Chinese rivals have
driven prices lower, and the high investment costs for
digital appliances have squeezed profits, JVC and
Kenwood said.
Victor, best known for its JVC brand of home
electronics goods, and Kenwood, famous for its car
audio systems, set share swap terms for the deal to
which they agreed in principle last summer
Under terms of the deal, Victor holders will have the
right to two shares in the new holding structure for
each Victor share owned, while Kenwood investors will
qualify for one share in the new company for each
Kenwood share owned.
In the fiscal year ending in March 2011, the new
company aims for sales of 830 billion yen ($8.0
billion) and operating profit of 39 billion yen ($375.9
million). Combined operating profit for Victor and
Kenwood was 9.6 billion yen ($92.5 million) last fiscal
year.
Kenwood Chairman Haruho Kawahara will serve as the
holding company's chairman, while Victor President
Kunihiko Sato will become president. The new company
will be based at Victor's headquarters in Yokohama,
near Tokyo. |
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