Will Pioneer Sell Off Its AV Business?

Pioneer hopes to strike a deal by July to divest itself of its A/V business but remain in the car electronics business, which generates 70 percent of sales, Nikkei reported.
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Pioneer hopes to strike a deal by July to divest itself of its A/V business but remain in the car electronics business, which generates 70 percent of sales, Nikkei reported.

Pioneer would also probably keep high-margin portions of the business, including DJ equipment, Nikkei said.

The company is said to be in talks with Funai Electric and other potential purchasers that could use the Pioneer brand.

Funai, it seems, is a logical suitor.

Pioneer executives in the U.S. were unavailable for comment in time for this post.

Pioneer’s A/V business includes audio components, soundbars, HTiBs, Blu-ray players, networked tabletop speakers, and other home and portable audio products but not TVs, a market that the company already left. In fiscal 2013, Pioneer’s A/V segment generated sales of 108 billion yen, or about 20 percent of the company’s total sales.

Funai might be interested in Pioneer’s audio business because its agreement with Philips to market Philips-brand, Philips-manufactured audio in North America on an exclusive basis end at the end of 2015. In addition, Philips entered a deal to sell its global audio business to Gibson Brands. The deal is expected to close in the second half.

Under the deal, Philips’s DVD and Blu-ray business will be transferred to Gibson in 2017 because of existing intellectual property licensing arrangements.

Funai company P&F USA is also the exclusive North American licensee for Philips-brand consumer TVs through 2015 under a separate agreement, which makes P&F USA responsible for the sourcing, distribution, marketing and sales of those products. Philips previously sold off its TV-manufacturing business to Hong Kong-based TP Vision (TPV).

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