Sharp & Voxx To Buy Onkyo After Brand Was Rejected By Sound United
Sharp and Voxx International the owners of the Premium Audio Company are in talks to buy Onkyo a brand they are desperate to get hold of so that they can compete with Sound United brands Denon and Marantz in the global receiver market.
The Premium Audio Company a Voxx subsidiary, has a questionable reputation and have been branded “dishonest”, after they conspired with staff of local distributor Qualifi which has recently been acquired by Sound United to take the Klipsch brand off Qualifi who also distribute Marantz and Denon receivers.
ChannelNews understands that Voxx were asked to invest over $128M in the struggling Onkyo business in talks earlier this year.
The struggling Japanese audio brand is on the verge of financial collapse.
Sharp is owned by Foxconn the maker of Apple iPhones.
Overnight Voxx said “VOXX International Corporation today announced that it has signed a Letter of Intent to acquire the Home Audio/Video business of Onkyo Home Entertainment Corporation, along with Sharp Corporation as its partner,”.
Last year Onkyo reached an agreement with Voxx International Corp to replace Onkyo USA as its US distributor.
Sharp already has a relationship with Onkyo, having produced Onkyo-branded products at its Malaysian manufacturing plant since 2017, ChannelNews understands that Sharp is a creditor of the struggling Japanese Company.
Founded in 1946 and once a household name in speakers, turntables, and stereo receivers, Onkyo has seen its situation worsen since its first failed attempt to sell its audio business in 2019 to U.S.-based Sound United.
It now faces delisting from the Tokyo Stock Exchange for breaching the market’s rules on negative net worth.
With its shares likely to be removed from the TSE around July, Onkyo “began considering all possible options for maintaining business continuity,” the company said earlier this week.
Onkyo described Sharp and Voxx as “suitable” partners with which it has collaborated in audio equipment before.
The company said it aims to reach a formal agreement that sets the terms of the deal by May 20.
A Sharp spokesperson confirmed that the company is considering the Onkyo proposal.
Selling its audio business, which accounted for 53% of total sales in the year ended March 2020, would leave Onkyo with no clear substitute in terms of earnings potential.
Besides making its own products, Onkyo is also a player in original equipment manufacturing (OEM), assembling television speakers and other devices for other brands.
When the company announced plans to sell its audio-visual business to Sound United in May 2019, CEO Munenori Otsuki said Onkyo would seek growth in OEM. Talks broke down in October after the two sides failed to agree on the terms of the deal. The announced sale price was about US $73 million at current rates.