Olympus and Sony announced the two companies entered into a business alliance agreement and a capital alliance agreement, through which, “the strengths of the two companies will merge,” Olympus says, making it possible for it “to contribute to world medical progress by developing a variety of new medical devices that would not be possible by Olympus alone. In the field of digital cameras, we will seek to achieve collaboration in a manner that further improves the competitiveness of the two companies.”
More to the point for the PMA audience: Sony say it “also believes there are many potential opportunities for collaboration between Olympus and Sony’s digital camera businesses, and are confident that by building on our respective strengths we can also enhance and grow our presence in this market.”
Olympus and Sony say they plan to “explore opportunities for collaboration between their respective camera businesses including transactions involving core components primarily for compact digital cameras, with the aim of enhancing the corporate value of each company.”
The companies say the business and capital alliances are expected to allow them “to combine Olympus’s lens and optical technologies, as well as the strength of its brand and R&D, with Sony’s broad range of technologies including digital imaging technologies and apply them in the rapidly growing medical market.”
The two companies “also aim to enhance their competitiveness, primarily in the area of compact digital cameras, by exploring opportunities for mutually beneficial transactions and collaboration between their respective camera businesses, including the supply of Olympus technologies such as camera lenses and mirror cells to Sony, and the provision of Sony image sensors to Olympus.”
Olympus says it “has been pushing to enhance its financial strength and weighing the possibility of a business and capital tie-up for greater business synergy in the core business domains of medical and imaging.” Olympus decided to ally with Sony, “which is strong in image sensors and other image-related technologies. Partnering with Sony will provide great advantage to Olympus and enable the two companies to exchange various complementary competencies. Investment from Sony will help strengthen our financial base.”
Sony adds it is “aggressively pursuing the growth of our medical business, with the aim of developing it into a key pillar of our overall business portfolio. The business and capital alliances we have agreed with Olympus today will be integral to these plans. By combining Sony’s cutting-edge technologies in areas such as digital imaging, 3D, and 4K with Olympus’s long-standing experience and established foundations in the medical market, we believe that we will be able to create highly innovative and competitive products and generate new business opportunities in surgical endoscopes and other related areas where significant future growth is anticipated.”
The capital alliance agreement calls for Olympus to issue 34,387,900 new common shares to Sony through a third-party allotment. Sony’s ratio of voting rights after the third-party allotment will be 11.46 percent. The price is 1,454 per share.
Olympus executives plead guilty
Former Olympus chairman Tsuyoshi Kikukawa pleaded guilty to charges of falsifying accounts, the BBC reports, covering up losses of $1.7bn. “There is no mistake. The entire responsibility lies with me,” Mr. Kikukawa said in court on Tuesday.
Two other former executives filed a guilty plea in Tokyo District Court. They face up to 10 years in prison, the BBC adds.
The three admitted to hiding losses dating back to the 1990s, which were brought to light by former chief executive Michael Woodford.