Announcement concerning the reorganization of subsidiary companies
Asset Purchase, Change in corporate name, New directors
This is to announce that Onkyo, effective as of March 2, 2015 has resolved to reorganize Onkyo’s subsidiary companies (“Subsidiary reorganization”) at Onkyo’s Board of Directors Meeting held on March 2, 2015, as follows:
I.The objectives and summary of Subsidiary reorganization
1.The objective for Subsidiary reorganization
Onkyo group has been taking various measures to respond flexibly to the rapidly changing market. As a part of this move, Onkyo and Pioneer Corporation (“Pioneer”) have continued discussions for the unification of the home AV business, the phone business, and the headphone-related business of Pioneer Group (Hereinafter, “Pioneer subject business”) with Onkyo’s. Based on the “Announcement concerning the finalization of the conditions for the issue of new shares through a third party allocation to Pioneer Corporation, the change in major shareholders, and the change concerning a specified subsidiary company” dated February 13, 2015, and as publicized in the “Announcement concerning the completion of payment for the issue of new shares through third party allocation and the change in the controlling shareholder” and “Announcement concerning the acquisition of shares accompanying change to subsidiaries”, both dated March 2, 2015, we are proud to announce that as of March 2, 2015, the issue of new shares of Onkyo through a third party allocation of shares to Pioneer, the change in major shareholders and the change in specific subsidiary companies, and the acquisition of home AV business and headphone-related business overseas conducted by a part of the overseas subsidiary companies of the Pioneer group (“Overseas business”) have been completed.
Accompanying these events, with the objective of making approach to business under a new structure to further strengthen the home AV business and to continue both the Onkyo and the Pioneer brands, business reorganization, involving the transfer of business among Onkyo’s subsidiaries (“Business transfer among Subsidiaries”) and the transfer of Overseas business to Onkyo’s subsidiaries will be conducted, together with the change in trade names of Onkyo’s subsidiaries as well as the appointment of new directors.
With these changes, we will aim to optimize the management resources and business of Onkyo’s subsidiaries, establish an organizational structure to promote approaches towards new businesses, and to further streamline corporate management, improve the performance and enhance the corporate value.
2.Summary of subsidiaries subject to reorganization and subsidiary business reorganization.
(1)Main business of subsidiaries subject to reorganization:
•Pioneer Home Electronics Corporation (“PHE”)
Planning, development, manufacturing and marketing of audio visual related products.
•Onkyo Marketing Japan Corporation (“OMJ”)
Marketing of audio visual related products in Japan.
•Onkyo Entertainment Technology Corporation (“OET”)
Products business for contents management, distribution, creation, planning and development of Hi-Res music and lifestyle planning product business, CRM business focusing on sales promotion, repairs of audio and PC products, customer support, new business development, and the planning, development and marketing of various products, such as digital signage, etc.
•Digital Acoustic Corporation (“DAC”)
Design and development of audio visual related products.
•Pioneer & Onkyo U.S.A. Corporation (“POU”)
Marketing of audio visual related products in North Americas.
•Onkyo Europe Electronics GmbH (“Onkyo Europe)
Marketing of audio visual related products in Europe.
•Onkyo Marketing Asia Ltd.(“Onkyo Asia”)
Marketing of audio visual related products in the Asian region, with focus on China.
(2)Summary of subsidiary business reorganization
Business transfer among Subsidiaries:
Partial transfer of business will be made from PHE to consolidated subsidiaries of Onkyo. Transfers of domestic marketing business of home AV products will be made to OMJ, the headphone-related and phone business to OET, and the design related business to DAC.
Transfer of Overseas business to subsidiaries:
The Overseas business acquired by Onkyo will be transferred to the overseas subsidiaries of Onkyo.
Change in the trade name of subsidiary companies and appointment of new directors:
For the purpose of continuing both the Onkyo and Pioneer brand deployment, each subsidiary will change their trade names to those using the brands of both companies, that have permeated the audio market over a long period. At the same time, new directors will be appointed to further enhance the brand power and expansion of business.
II.Summary of Business transfer among Subsidiaries
(1)The reason for Business transfer among Subsidiaries and details of the business transfer:
In the unification of Onkyo and Pioneer subject business, functions common to both related to marketing and design will be consolidated to Onkyo’s consolidated subsidiaries, to manage the functions under a uniform control, and target for the enhancement of business competitiveness and profit earning strength. Business related to domestic sales will be transferred to OMJ and business concerning design to DAC. In order to capture the Hi-Res market, which is expected to grow further through the enhancement of lifestyle planned products focused on headphones, the headphone-related and phone business will be transferred to OET, who operates “e-onkyo music”, the Hi-Res music distribution site, targeting to provide a new music experience in both software and hardware.
(2)Business transfer date: March 2, 2015
III. Summary of transfer of Overseas business
As of March 2, 2015, the transfer of Overseas business acquired from Pioneer group have been completed, with business related to marketing in North Americas transferred to POU, business related to marketing in Europe to Onkyo Europe, business related to marketing in the Asian region focusing on China to Onkyo Asia, and business related to overseas marketing in other areas to Onkyo.