BREAKING NEWS:Pioneer + Onkyo Consumer AV Operations To Merge
They have also announced the transfer of shares to Baring Private Equity Asia who will hold a 51% share in the new entity.
Pioneer Home Electronics Corporation a wholly-owned subsidiary of Pioneer, will be transferred to Baring and Onkyo.
After the transfer, Baring will have 51% stake in PHE. The remaining 49% will be determined in consultation between the related parties.
They claim that the move has been made as AV technology moves from analogue to digital equipment, where music playback set to go wireless and digital.
The combined groups Pioneer and Onkyo are set to work together in an effort to be more competitive as the AV and sound market switches to a new generation of technology.
For the fiscal year ended in March, Pioneer generated 70% of its revenue from car electronics while its home electronics division, which includes audiovisual equipment, only accounted for about one fifth of its revenue totaling $4.8 billion. Its home electronics unit logged a tiny operating profit for the previous fiscal year and it was in the red just two years ago.
A spokesman for the fund declined to comment on how much it was investing in Pioneer’s home electronics unit.
Both companies will retain their existing brands. Currently Onkyo which is 52% owned by Gibson Brands in the USA is distributed by Amber Technology. This could change with the local Pioneer subsidiary taking over distribution.
PHE was set up in July 2013 as a wholly-owned subsidiary of Pioneer Corporation for planning, manufacturing and the sales and marketing of Home AV products.
The Company claims that high quality audio/video and communication-related equipment designed by PHE have been the core businesses of Pioneer and that this will continue under a merged Company.
Onkyo which was established in 1946 has struggled in Australia with one major retailer deranging their product recently.
Baring Private Equity Asia is one of the largest and most established independent private equity firms in Asia and advice funds with total committed capital of over US$5 billion. The firm advises on a pan-Asian investment program.