Hitachi Launches Take Over Bid for Clarion
By Amy Gilroy -- TWICE, 10/11/2006
Tokyo - Hitachi announced that it has signed a basic agreement with Clarion., which could lead to the purchase of Clarion.
A U.S. spokesman for Hitachi said that the overseas parent could make a takeover bid for Clarion as early as Oct. 25.
According to a Hitachi press release on Business Wire here, Hitachi has “decided” to purchase additional shares of Clarion as part of a takeover bid and that Clarion’s Board of Directors “expressed its approval” of the take over bid at a meeting on October 11, 2006.
The report said Hitachi is interested in further developing Clarion’s strengths in producing in-vehicle entertainment systems such as in-car navigation systems, as well as its car A/V marketing capabilities for both the OEM and aftermarket sectors worldwide.
If the takeover is completed, Xanavi Informatics Corporation, a wholly owned subsidiary of Hitachi, would become a wholly owned subsidiary of Clarion. Hitachi believes that by integrating Clarion and Xanavi, it can strengthen the Hitachi Group’s car information systems business. This would include bolstering its software offerings for in-car systems, and the development of future technologies, as well as strengthening its supply chain for the procurement of materials, said Business Wire.
In December 2000, Hitachi and Clarion established a joint venture company, HCX Corporation, to develop car information systems. Then in December 2004, Hitachi purchased Clarion shares to become Clarion’s largest shareholder. This was followed by an agreement in April 2005 on the part of the two companies to strengthen cooperation in the car information system field. Based on this agreement, Hitachi and Clarion have been cooperating in technological development and materials procurement for navigation systems and other products and systems.
In the U.S. Clarion has been ranked as the No. 11 player in car CD player sales according to industry reports. Hitachi offered car audio aftermarket products in the 1980s and 1990s, but has since exited the U.S. aftermarket.
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