Olympus has announced it`s agreed in principle to divest itself of its imaging business by transferring it to a new company that will continue to run it. The company that will run the new business is Japan Industrial Partners, and Olympus hopes that the final agreement will be made in September and the deal closed by the end of the calendar year.
In a statement, Olympus says the new company will carry on making and selling camera equipment and suggests it will maintain R&D and manufacturing facilities around the world. Crucially, the new company will also provide support to existing Olympus camera owners.
After three years of losses Olympus says it needs a more ‘compact, efficient and agile` corporate structure and claims having a new company run the camera business is the only way to make it survive and grow. The company blames the rise in smartphones as a continuing factor in the decline of the camera market, and says it has done what it can to reduce costs. However, further cost-cutting is to come as the imaging business is prepared for its transfer so that it can be taken on in a more ‘profitable and sustainable` condition.
Press release:
Signing of Memorandum of Understanding for Divestiture of Imaging Business
Olympus Corporation (`Olympus`) and Japan Industrial Partners, Inc. (`JIP`) hereby announce that, today, the parties signed a memorandum of understanding to carveout Olympus`s Imaging business to a new company (“NewCo”) and subsequently transfer its shares to a fund managed, operated or otherwise handled by JIP (the `Transaction`). After the due diligence and further discussions and negotiations, the parties are aiming to sign a legally- binding definitive agreement for the Transaction (the `Definitive Agreement`) by September 30, 2020. We will promptly make further announcement if any matters relating to the Transaction that needs further announcement occur.
1. Background and Purpose of the Transaction ...
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