Japanese audio equipment maker Onkyo is no longer in talks to sell its flagship home audiovisual business to American company Sound United, the company said on Friday.

On May 21, 2019 Onkyo Corp. entered into an agreement with Viper Holdings Corpo. to transfer all shares of its consolidated subsidiaries Onkyo & Pioneer Corporation, ONKYO ASIA ELECTRONICS SDN.BHD, Onkyo & Pioneer Marketing Japan Corporation, and part of the business for Pioneer & Onkyo Marketing Asia Ltd. and Onkyo (Shanghai) Trading Co., Ltd.

Onlyo on Friday sais that in mutual agreement with Viper Holdings Onkyo’s Board of Directors has resolved to terminate this Transfer.

Onkyo agreed to assign its Home AV related business to Sound United in order to focus its business resources and technology in the two areas it believes to have strongest growth potential – Digital Life portable products and OEM products and services targeting the B2B space. Onkyo’s rationale was that the combination of Onkyo’s already premium brands, engineering and manufacturing capabilities with Sound United LLC’s strong portfolio of Denon, Polk Audio, Marantz, Definitive Technology, HEOS, Classé, and Boston Acoustics would well position the new group to capture the future growth of music and entertainment in the home. The arrangement would have allowed Onkyo to continue to capture the growth of this business through future licensing royalties.

"However, the completion of the transaction was subject to several conditions, including the finalization of all definitive agreements, completion of satisfactory due diligence, securing of committed financing and various other required approvals. At this point, Onkyo and Viper Holdings have mutually agreed to terminate the Transfer based on the determination that a closing cannot be achieved by November 30, 2019, the expiration date of the agreement. Onkyo still believes in the value of combining these businesses and will remain open to future discussions should conditions change but for now Onkyo has determined that it is time for the organization to return to dedicating its attention and resources to running its Home AV business independently," Onlyo said in a statement.

Onkyo, one of Japan's oldest audio equipment makers, has suffered through five straight years of losses.