Kenwood announced today that they and JVC will be teaming up to bring products to market in the car and home electronics arena to pool development and save costs. It seems that merging the two companies under a holding company is in discussions at this time.
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The deal would have JVC issuing $290 million in new shares to Kenwood and top Kenwood shareholder, Sparx Group. Kenwood would then pay $167 million for 17% of JVC with Sparx buying an additional $125 million in JVC shares for a 12.8% stake in JVC.
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Kenwood USA Corporation President Shoichiro Eguchi said: "Digital merchandise that requires large-scale investment for production and extensive software development is now the centerpiece of the consumer electronics industry. The overwhelming trend of digital merchandise is shorter product development cycles and fiercely aggressive pricing. This trend has made the consumer electronics market extremely competitive, however Japan Victor and Kenwood agree that a strategic alliance in car electronics and home/portable audio, as well as the unification of both companies' management, would bring opportunities for success in a challenging AV market." Via Kenwood