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JVC finalises Kenwood merger
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By Chris Nicholls
TOKYO: JVC has finalised its merger with Kenwood, announcing its “management integration” plan will commence 1 October.
In an announcement to investors, the two firms said a joint venture named JVC Kenwood Holdings, Inc. would now hold 100 per cent of the two companies’ shares after shareholder approval on 27 June.
The holding company will represent both companies on the Tokyo Stock Exchange after 1 October, with the JVC and Kenwood names disappearing from the listings 25 September.
In a separate document on JVC’s global website, the company outlined a plan to achieve positive results in FY08 as a result of the restructure, as well as increase profits in FY09.
So far, according to a graph in the plan outline, profits have risen despite sales dropping compared with previous quarters in FY08 to 150 billion yen.
By 2009, the company hopes to increase operating profit to eight billion yen, up from the 3.3 billion this year.
JVC said the merger would aim to make the joint venture holding company a “world leader” specialising in AV products, with a focus on both home audio and in-car entertainment and navigation.
Navigation unit sales were expected to more than treble to one million units a year, up from 300,000 now (combined JVC and Kenwood sales). In-car audio sales for both companies were expected to rise from eight million to 10 million units.
The joint company will also expand into new, unspecified, business areas, JVC said, but said it would focus on “new, unconventional products”.
Kenwood has already contributed 35 billion yen to JVC to help keep the company afloat, as well as imparting advice based on its own restructure experience.
The merger is expected to yield over 30 billion yen in profit gains, with 10 billion yen in savings.
JVC shareholders will receive two shares in the new joint holding company for every JVC share owned, while Kenwood investors will lose out with only one holding company share per Kenwood share owned.
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[Tue 01/07/2008 02:48:46]
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