Gibson Guitar Buys Stake in Onkyo Corporation & Takes Control of Onkyo USA

Onkyo logo<January 4, 2012> In a surprise move, Gibson Guitar Corporation announced that it has invested in Osaka, Japan-based Onkyo Corporation as part of what it called a “strategic partnership” pursued as part of a “continued diversification into the music and audio lifestyle arena.” The company also announced that it has taken a majority interest in Onkyo’s American subsidiary, Onkyo USA Corp.

In a prepared statement, Gibson said that its new Pro Audio Division will benefit from the “substantial technology resources” of Onkyo, while Onkyo will benefit from its “marketing resources and expertise.” The company expects to be able to offer “a far superior audio experience” to consumers who have become accustomed to “inferior compressed music.”

The deal will make Gibson the second largest investor in Onkyo, presumably after the Otsuki family who purchased the company from Toshiba Corp. back in the early 1990’s. Gibson Chairman and CEO Henry Juszkiewicz will take a spot on the Onkyo Corp. board of directors. The company said that Onkyo’s current CEO and President, Munenori Otsuki, will have a spot on the company’s board as well.

The two companies are said to be forming a Hong Kong-based joint venture (JV) “focusing on design and development” of future consumer products. This suggests expansion into products that move beyond Onkyo’s existing manufacturing capabilities.

“Onkyo makes some of the world’s best audio equipment, and this partnership will give Gibson the ability to bring a deeper and more enhanced audio experience to music lovers around the work,” Juszkiewicz said in a prepared statement. “While people may be listening to more music, they are listening to it primarily in a severely compressed format. The aural disparity between a real system and compressed sound is vast, and as a result, they are simply not hearing tremendously rich sounds. With Onkyo, our goal is to bring the same exceptional experience artists demand in the studio to a larger consumer base.”

“The partnership has significant positive implications for Onkyo as we are always seeking ways of creating new value,” said Otsuki. “Gibson is a leading global company with a massive fan base, best-in-class products and superior marketing skills. Coming together in this way opens the door for amazing opportunities for both companies and, more importantly, fans of Onkyo and Gibson.”

Onkyo is a public company in Japan and will likely have to seek approval of the board and shareholders to the deal which still requires “negotiation of definitive agreements.”

Calls to various Onkyo executives were not answered by press time so it is unclear just how this deal will affect the company’s various dealers and sales representatives. ALERT editors will follow up with further reports as the situation becomes more clear.

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