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Will The Chinese End Up Owning Olympus Camera After The Japanese Bail Out

As cameras in Smartphones become the norm for shooting pictures Japanese camera Company Olympus has decided to pull the plug on their SLR camera business due to shrinking sales with the business sold to a Japanese Equity Company.

Overnight Olympus Corp announced that they are selling its loss-making imaging unit and will focus on its core medical business with some insiders tipping that the business will eventually be sold to a Chinese manufacturer.

What’s not known at this stage is what will happen to the NSW based Australian camera operation or whether the new owners plan to move to a distributor model locally.

Currently several retailers including JB Hi Fi, Teds Cameras and Camera Warehouse are ranging Olympus cameras.

According to Malcolm Kennedy the Managing Director of camera distributor CR Kennedy the business “Will most likely be sold to a Chinese Company”.

Olympus announced that it had signed a memorandum of understanding to carve out its imaging business and transfer the shares to a fund run by Japan Industrial Partners, a private equity firm.

Japan Industrial Partners was established in 2002 by Mizuho Securities and others. Major investment deals include the purchase of Sony’s Vaio personal computer business in 2014 as well as Hitachi’s electronic equipment subsidiary for 257 billion yen through a partnership with U.S. private equity firm KKR.

“JIP has strong track records in supporting strategic carve-outs that realize growth potential and encourage autonomous growth,” Olympus said in its statement.

The parties would aim to reach terms for a binding transaction by Sept. 30 and try to complete the deal by the end of the year, they said in a statement.

The company started making cameras in 1936 and became one of the best recognized Japanese brands, with well-known models such as the Olympus Pen.

Analysts claim that like many companies in the same lines of business, it has struggled to adapt to a market transformed by digital imaging and smartphones.

Olympus said it had tried to improve the unit’s cost structure as sales declined by restructuring its manufacturing and focusing on high-value-added interchangeable lenses. “Despite all such efforts, Olympus’s imaging business recorded operating losses for three consecutive fiscal years up to the term ended in March 2020,” the company said.

In the 12 months to the end of March 2020, the imaging division booked revenues of $409 million, down 10% year on year, and an operating loss of 10.4 billion yen, compared with a loss of 18.3 billion yen in fiscal 2019.

The imaging business made up less than 6% of group revenues in the year to the end of March — dwarfed by Olympus’s sales of medical systems such as endoscopes and surgical devices.

Japan Industrial Partners was established in 2002 by Mizuho Securities and others. Major investment deals include the purchase of Sony’s Vaio personal computer business in 2014 as well as Hitachi’s electronic equipment subsidiary for 257 billion yen through a partnership with U.S. private equity firm KKR.

“JIP has strong track records in supporting strategic carve-outs that realize growth potential and encourage autonomous growth,” Olympus said in its statement.

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