updated 12:55 pm EDT, Mon May 12, 2008
JVC and Kenwood to merge
Japanese electronics giants JVC and Kenwood have announced plans to merge, Reuters reports. The two companies will come together under a holding company on October 1st, in what they say is an attempt to fight price competition, as well as increasing costs in development. Even together the companies' sales for the financial year ending March 31st would only have been 823.7 billion yen ($8 billion), less than a tenth of those for Panasonic owner Matsushita, which made approximately 9 trillion yen (over $87 billion).
Each JVC share will be exchanged for two shares in the holding company, while each Kenwood share will be worth only one in its new parent. Kenwood chairman Haruo Kawahara will take an identical role in the new company, while JVC president Kunihiko Sato will do the same.
Together the companies hope to raise their operating profit to 39 billion yen in 2011, up from a combined number of 9.6 billion last year. This is expected to be accomplished by eliminating unnecessary duplication in both development and parts procurement.