TOKYO, Sept 28 Sony Corp will pay 50
billion yen ($643.5 million) to become the biggest shareholder
in Olympus Corp, and establish a company with the
cash-strapped Japanese camera and endoscope maker to develop
In a widely flagged deal, Sony said in a release that it
will hold an 11.46 percent stake after buying new shares issued
by Olympus. The two companies will also look for ways to
cooperate in digital cameras.
"We are aggressively pursuing the growth of our medical
business, with the aim of developing it into a key pillar of our
overall business portfolio," Sony's Chief Executive Kazuo Hirai
said in a statement on Friday.
Sony wants to nurture new businesses as it retreats from
money-losing television manufacturing, while Olympus needs cash
to fix its depleted finances after an accounting scandal forced
it to restate several years of earnings.
Although it fits Sony's revival strategy, some analysts have
questioned the cost of the acquisition in the wake of losses,
arguing that a non-capital tie up would have made more sense.
Prompted by persistent weakness in its consumer electronics
division, Standard & Poor's on Tuesday cut Sony's long-term debt
rating by one notch to BBB, the second-lowest investment grade.
In selecting Sony as a partner, Olympus rejected offers from
medical device maker Terumo Corp and camera maker
Fujifilm Holdings Corp. Those two companies, which
compete more directly with Olympus, were proposing closer ties
Rocked by the accounting scandal, Olympus booked a net loss
of 49 billion yen in the year to March 31.
In June, its ratio of shareholders' equity to total assets
fell to 2.2 percent from 4.6 percent in March. The figure is a
barometer of a company's liquidity, with the 20 percent level
regarded as indicative of financial stability.
The allotment of new shares to Sony is expected to raise the
ratio to 10 percent.
Sony's Hirai and Olympus's President Hiroyuki Sasa will hold
a press conference in Tokyo at 0030 GMT on Monday to explain the