Posted on 05/12/2008 3:47:11 PM PDT by steveo
TOKYO (Reuters) - Japanese electronics makers JVC (6792.T: Quote, Profile, Research) and Kenwood Corp (6765.T: Quote, Profile, Research) said on Monday they would merge under a holding company on October 1 to fight fierce price competition and growing costs of product development.
But the new entity would still fall far behind some of its rivals in size as combined sales of the two companies totaled 823.7 billion yen ($8 billion) in the year ended March 31, or less than one-tenth of Panasonic maker Matsushita's (6752.T: Quote, Profile, Research) 9 trillion yen.
Kenwood offers car electronics and audio equipment, while JVC is a medium-sized consumer electronics maker with strength in camcorders equipped with hard disk drives.
The announcement came as little surprise because sources close to the matter said last week Victor Co of Japan Ltd (JVC) and Kenwood had agreed to integrate their businesses in October.
Kenwood and asset manager Sparx Group (8739.Q: Quote, Profile, Research) acquired a combined 30 percent stake in loss-making JVC for 35 billion yen last year, and Kenwood and JVC have been in talks with eyes on merging their operations under a holding company.
JVC and Kenwood aim to bring the holding company's operating profit to 39 billion yen in the year ending March 2011, up from a combined profit between the two companies of 9.6 billion yen in the business year ended March 31, by cutting costs through joint development and joint procurement of parts and materials.
Each JVC share will be exchanged for two shares in the holding company, JVC Kenwood Holdings Inc, while one share in the new entity will be allotted for each Kenwood share.
Kenwood Chairman Haruo Kawahara will become chairman of the holding company, while JVC President Kunihiko Sato will become president of the new organization.
Shares in JVC, 36.8 percent owned by Matsushita Electric Industrial Co, closed up 7.6 percent at 285 yen ahead of the announcement, while Kenwood rose 3.1 percent to 133 yen, outperforming the Nikkei average's .N225 0.6 percent gain.
With the dwindling population of hams and competition for fewer buyers heating up could Kenwood be one of the first to throw in the towel?
Ping to read later
I have the Kenwood tmg707a. Its a great radio.
It would be terrible if they stopped making ham equipment.
ICOM and Kenwood share a lot of R&D and are doing some great things for ultra-narrowband commercial comms (6.25k digital) - different from ICOM’s D-STAR. Also Kenwood and Zetron merged for public safety projects. Kenwood did not have a good console, and Zetron has a great console lineup.
I was thinking along the same lines.
Lets hope not.
I’ve been wondering about Kenwood for a while. The TS-2000 is getting long in the tooth. Actually, their whole line is.
I personally think that Icom now offers the best HF rigs (would love a 746 Pro).
I have some very old Icom and Yaesu stuff that still works like new. A neighbor still uses an IC-25A I bought back in 1982. I have a working 37A from 1984 and a 3AT from somewhere around the same time. The 2AT bought in 1983 would probably still be in use if it hadn't been stolen several years ago. FT747GX portable HF rig bought in 1988 also still working. That and a couple slightly newer Crap Shack HTs are what I keep in the box of stuff I take when I head for the hills (which is about the only time I operate anymore).
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