Gibson Guitars, which last year bought a 51 percent stake in Onkyo USA, is buying a majority stake in Japan’s Teac to share technology and marketing ideas and reduce expenses, the companies announced.
Gibson is buying 157.4 million shares at 31 yen per share, or $51.8 million based on a conversion rate of 94.1 yen to the U.S. dollar.
The transaction, representing Gibson’s largest investment to date in another company, was unanimously approved by both companies’ boards of directors.
Gibson, which also bought a stake in Onkyo USA’s parent in 2012, offers pro audio equipment and musical instruments. Teac offers a range of products including pro and consumer audio, broadcast equipment, medical equipment, in-flight entertainment systems and recordable optical discs.
In the U.S., the three companies have an opportunity to work together to reduce costs, Gibson and Teac said in a prepared statement.
Gibson stands to benefit from Teac’s technology, and Teac stands to benefit from Gibson’s “marketing and distribution strength,” said Gibson chairman/CEO Henry Juszkiewicz during a press conference here.
Said Teac president Yuji Hanabusa, “We can work together to reduce costs and bring benefits to all three parties.” Although Hanabusa said he had no concrete examples yet to offer on cost savings, he said the combination of companies “will be a huge benefit to all of us.”
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