Reuters quoted Pioneer’s statement that the maker of automotive and home audio electronics will sell a 51 percent stake in Pioneer Home Electronics to Hong Kong-based Baring Private Equity Asia investment fund. Another part of the shares its size was not disclosed will be received by the Japanese developer of audio equipment Onkyo. Meanwhile, Pioneer will retain a stake in its audio-visual business, Nikkei specifies.
Despite denials of rumors that Pioneer is leaving the home audio and video market, the Japanese company has still decided to sell most of its business. Its buyer will not be Funai Electric, as previously reported.
Pioneer Home Electronics makes and sells DVD players, home theater systems, digital photo frames and various audio equipment. The unit posted revenue of 108 billion yen $1.05 billion in the fiscal year ended March 31, accounting for one-fifth of total Pioneer revenue. Operating profit of the audio and video production business was insignificant and in the previous two years, Pioneer Home Electronics had been loss-making at all.
Pioneer was also in talks with Funai Electric and D&M Holdings about selling the firm, but Baring Private Equity and Onkyo were the buyers. The latter is a well-known manufacturer of audio-visual equipment in Japan and is a competitor of Pioneer in this market. Now these companies will work together: Pioneer will help Onkyo with product design, distribution and sales, and provide support for component purchases. The units will continue to be sold under the Pioneer brand.
Pioneer, Baring Private Equity and Onkyo plan to close the deal by the end of August this year. The two sides will decide on the financial side and their shares in Pioneer Home Electronics. Once all the formalities regarding the sale of its home audio and video equipment business to Pioneer are settled, the company will be able to focus on the production of car electronics, which account for more than 70% of the vendor’s revenue.
Pioneer shares gained 4% in trading on Tuesday, June 24, compared to the previous day and finished at 229 yen per share. Onkyo, whose last year’s revenue exceeded $350 million, rose 12.6% to 168 yen.
What are the reasons behind Pioneer going bankrupt and why did the renowned manufacturer decide to sell its home audio and video equipment business?
What were the reasons behind Pioneer’s bankruptcy?
What led to Pioneer’s downfall as a renowned manufacturer and why did they sell their home audio and video equipment business?
What led to Pioneer going broke? Was it due to financial mismanagement or declining demand for their home audio and video equipment? Additionally, who acquired their business and what does this mean for the future of their products?