Sony ties up with Olympus, takes 11 percent stake (Update)

Sep 28, 2012 by Yuri Kageyama
In this Feb. 27, 2012 file photo, newly-appointed President of Olympus Corp. Hiroyuki Sasa, left, speaks as his predecessor Shuichi Takayama, second left, and two outside directors of the company, Hiroshi Kuruma, second right, and Yasuo Hayashida, attend a press conference in Tokyo when the entire board of scandal-tainted Olympus resigned and the new president was tapped to lead a turnaround at the Japanese medical equipment maker. Sony and Olympus have agreed on a business alliance that will see Sony Corp. invest 50 billion yen ($640 million) for an 11 percent stake in the embattled medical equipment and camera company. Olympus has been on shaky ground after its British chief executive turned whistleblower and helped unearth a scandal involving a systematic cover-up of massive losses. (AP Photo/Koji Sasahara)

(AP)—Sony is expanding its sprawling electronics to movies business empire with a new venture—looking inside the human body.

The company on Friday said it will spend 50 billion yen ($640 million) for an 11 percent stake in Olympus Corp., an embattled maker of endoscopes, which are the long thin camera-equipped instruments that allow medical professionals to peer inside the body.

The deal was widely expected as Sony president Kazuo Hirai had expressed interest in moving into the medical equipment business.

Olympus Corp. is the world's biggest maker of endoscopes and is also known for its cameras. It has been on shaky ground after its British chief executive Michael Woodford turned whistleblower and helped unearth a scandal involving a systematic cover-up of massive losses.

Sony Corp. has its own problems and is hoping new businesses will be part of its turnaround. Sony has reported losses for four straight years as it fell behind in portable music players, flat-panel TVs and smartphones. Sony's red ink for the latest fiscal year through March was the worst in its 66-year history.

The two companies said they will set up a new medical equipment company together later this year, 51 percent owned by Sony and the rest by Olympus.

The alliance between Sony and Olympus will focus on the camera business as well, and both sides can benefit from sharing their technology, and working together to become more competitive, they said. In such alliances, companies can share in procurement on parts, boosting their bargaining power with suppliers and lowering costs.

"I will do my best to make this meaningful and profitable for both Olympus and Sony," Hirai said in a statement. Sony will become the biggest shareholder in Olympus after acquiring the 11 percent stake.

In this April 12, 2012 file photo, office workers leave the headquarters of Sony Corp. in Tokyo. Sony and Olympus have agreed on a business alliance that will see Sony invest 50 billion yen ($640 million) for an 11 percent stake in the embattled medical equipment and camera company. The deal, announced Friday, Sept. 28, was widely expected as Sony president Kazuo Hirai had expressed interest in such a move as part of a turnaround at the Japanese electronics and entertainment company. (AP Photo/Koji Sasahara, File)

Olympus President Hiroyuki Sasa said working with Sony will help shore up Olympus' finances, and that its endoscope business would benefit from Sony's image-sensor technology.

Sasa and Hirai plan a joint news conference Monday morning in Tokyo, where they will likely face questions about how two troubled Japanese companies getting together might lead to them competing more successfully on the global stage.

Earlier this week, Sasa was at the Tokyo District Court to enter a guilty plea for Olympus, along with three former executives who faced charges as individuals, in the opening session of a trial into the fraudulent financial reports.

Olympus has said it hid 117.7 billion yen ($1.5 billion) in investment losses dating to the 1990s.

Prosecutors outlined in detail the elaborate schemes concocted over the years, using overseas bank accounts, paper companies and transactions controlled behind-the-scenes, all to keep massive losses off the company books.

Explore further: China's Xiaomi raises more than $1 bn in funding

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Sony's Hirai to replace Stringer as CEO in April

Feb 01, 2012

(AP) -- Sony Corp. announced Wednesday that Kazuo Hirai, who leads the company's core consumer products business, will replace Howard Stringer as CEO and president effective April 1, as the electronics and ...

Olympus whistleblower wins millions in settlement

Jun 08, 2012

(AP) — Former Olympus Corp. Chief Executive Michael Woodford will receive 10 million pounds ($1.2 billion yen, $15.4 million) in a settlement over his dismissal from the Japanese camera and medical equipment maker. Olympus ...

Hit by yen, Thai floods, Sony sees wider net loss

Feb 02, 2012

(AP) -- Battered by weak TV sales, a strong yen and production disruptions from flooding in Thailand, Sony Corp. on Thursday reported a net loss of 159 billion yen ($2.1 billion) for the October-December ...

Japan's Fujifilm seeks tie-up with Olympus

Jan 30, 2012

Japanese film and camera maker Fujifilm has offered scandal-hit Olympus a capital and business tie-up, it said Monday as it announced a slump in third-quarter profits.

Sony to cut 10,000 jobs, turn around TV business

Apr 12, 2012

(AP) -- Faced with mounting losses, Sony Corp. said Thursday it will slash 10,000 jobs, or about 6 percent of its global workforce, and try to turn around its money-losing TV business over the next two years.

New Sony president gets shareholder approval

Jun 27, 2012

(AP) — Kazuo Hirai, the former head of Sony's game division, won shareholder approval Wednesday to steer a turnaround at the struggling Japanese electronics giant as its new president and chief executive.

Recommended for you

China's Xiaomi raises more than $1 bn in funding

20 hours ago

China's top smartphone seller Xiaomi Corp. is raising more than $1 billion in a fresh round of funding, a move which would raise its valuation above $45 billion, a report said Sunday.

Why the Sony hack isn't big news in Japan

Dec 20, 2014

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

Dec 20, 2014

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

Dec 20, 2014

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

2012 movie massacre hung over 'Interview' decision

Dec 19, 2014

When a group claiming credit for the hacking of Sony Pictures Entertainment threated violence against theaters showing "The Interview" earlier this week, the fate of the movie's big-screen life was all but ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.