Kenwood, Sparx to acquire 25 per cent in Matshusita''s JVC for ¥30 billion; report

20 July 2007

Kenwood, which makes car navigation system and audio visual products, and Sparx, an investment fund company, will spend ¥30 billion to subscribe to new shares to be issued by the struggling consumer electronics maker JVC, the newspaper reported.

The deal would help struggling Japanese consumer electronics maker JVC to boost its financial strength and keep up with the fierce price competition, sources close to the matter said.

Under the deal, Matsushita Electric Industrial Co. Ltd , which holds a 52-per cent stake in the company would lower it to 39 per cent and take the loss-making company off its consolidated accounts.

After the transaction, Kenwood would hold a 10 per cent stake in JVC while Sparx would own a 5 per cent stake.

Panasonic maker Matsushita would raise 30 billion yen ($250 million) by issuing 20 billion yen worth of new shares to Kenwood and 10 billion yen worth of new shares to Sparx Asset Management.

JVC and Kenwood had reached a preliminary agreement to merge under a holding company as early as June 2008, but the two firms are set to continue talks on the matter since there is still resistance within JVC against the plan, the sources said.