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July 24, 2007
KENWOOD CONFIRMS JOINT BUSINESS DEVELOPMENT PROGRAM WITH JVCLong Beach, CA, July 24, 2007 - Kenwood and JVC have announced plans to start working together in the car and home electronics business in an effort to pool development resources and save costs. Although the merging of both operations under a holding company is presently under discussion, there is no confirmation as of this date.
As part of the alliance, JVC will issue a total of 35 billion yen ($290 million) worth of new shares to Kenwood and Kenwood’s top shareholder, Sparx Group. Kenwood will pay 20 billion yen ($167 million) for a 17% stake in JVC while Sparx will buy 15 billion yen ($125 million) worth of shares, acquiring a 12.8% stake.
Kenwood USA Corporation President Shoichiro Eguchi said “Digital merchandise that requires large-scale investment for production and extensive software development is now the centerpiece of the consumer electronics industry. The overwhelming trend of digital merchandise is shorter product development cycles and fiercely aggressive pricing. This trend has made the consumer electronics market extremely competitive. However, Japan Victor and Kenwood agree that a strategic alliance in car electronics and home/portable audio, as well as the unification of both companies’ management, would bring opportunities for success in a challenging AV market.”
In the car electronics business, the total of both companies’ business size currently reaches 160 billion yen ($1.4 billion). There are several advantages of a larger business scale and management alliance in R&D, purchasing, and production through effective sharing of common resources.
“A unification of resources offers added value and competitiveness in the market, and we look forward to new opportunities in the consumer electronics markets,” said Eguchi. |
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