Reports: Olympus-Sony partnership
6/22/2012 10:09 AM EDT
PARIS — Japan’s economic journal Nikkei reported that Olympus Corp. is negotiating a roughly 50 billion yen investment from Sony Corp. The move, if materialized, will make Sony a partner in Olympus’ efforts to rebuild itself from last year’s accounting scandal.
Under the agreement, anticipated next month, Sony will acquire a more than 10 percent stake of Olympus, Nikkei reported, thus making the consumer electronics giant Olympus’ largest shareholder.
The Olympus-Sony partnership is believed to be motivated by the two companies’ mutual interest in expanding their business in the medical equipment market. According to Nikkei, Olympus controls about 70% of the global market for endoscopes, while Sony has strength in optical sensors. Together, they would seek to cement Olympus' lead.
Sony is on the record stating that health care is a key part of its growth strategy. The company is said to be planning to increase sales in this segment to 100 billion yen in three to five years. With Olympus as a partner, Sony hopes to leverage Olympus’ sales network in the medical field.
In contrast, it’s less clear how Olympus’ imaging business, which includes digital cameras, will be salvaged by joining forces with Sony. The imaging business has lost money for two straight years.
Meanwhile, Sony maintains a sizeable market share in cameras.
Nikkei reported that Sony wasn’t alone pursuing a partnership deal with Olympus. Others in the race include Panasonic Corp., Fujifilm Holdings Corp. and Terumo Corp.
Although Panasonic was seen at one point as a promising contender, the Osaka-based company has reportedly given up on an investment deal.
This is largely because Panasonic, whose first order of business now is to recover from its net loss of about $10.2 billion for fiscal 2012, needs to focus, not to diversify, on its business strategy.
Shifting its emphasis from consumer electronics to industrial applications, Panasonic recently made it clear that the company’s key business will be in environment- and energy-related businesses.