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Matsushita May Sell Part Of JVC Stake To Kenwood

12/26/2006 08:23:00 AM Eastern

New York — According to published reports out of Japan, Matsushita Electric Industrial, marketers of the Panasonic brand, is reportedly interested in selling at least half its stake in Victor Company of Japan, makers of the JVC brand to prospective buyer Kenwood Corp.

Matsushita has a 52.4 state in JVC and plans to cut that to less than 20 percent by next June’s general shareholders meeting, according to the Nihon Keizai Shimbun and other reports.

Matsushita issued a statement on Dec. 23, that, “The company has not decided anything in regards to the sale of its state in Victor Company of Japan, Ltd.”

Reportedly JVC president Masahiko Terada met with Kenwood president Harou Kawahawa earlier this month concerning a possible deal.

U.S. investment firm Cerberus Group is negotiating with JVC to provide the necessary capital to acquire the shares from Matsushita.

JVC, developers of the VHS-format VCR, has been hard pressed in recent years by increased competition in CE.

JVC reported it returned to profitability during its first half that ended Sept. 30 with its cost-cutting programs during 2006. The net income for the first half was $42.2 million vs. last year's first half loss of $128.5 million. While JVC posted a profit for the half, net sales were down slightly. Net sales for the first half were $3.11 billion, slightly lower than last year's $3.25 billion for the same period.

Looking at JVC by product segment its largest is CE, where it had $2.3 billion in sales during the first half, lower than the $2.41 billion during last year. Overseas sales for all JVC categories hit $2.2 billion during the first half, slightly higher than the $2.19 billion of last year.