Nashville, Tenn. - Gibson Guitar, the musical instrument manufacturer, will enter into a strategic partnership with Onkyo in which it will acquire a majority of Onkyo USA and become the second largest shareholder of Onkyo Corp. in Japan.
Onkyo USA is the parent company's exclusive distributor for North America and a distributor for Central and South America.
Onkyo will also invest in Gibson, and the two companies will form a Hong Kong-based joint venture focusing on design and development of consumer audio products.
In addition, Gibson chairman/CEO Henry Juszkiewicz will take a seat on Onkyo's board of directors, and Onkyo president/CEO CEO Munenori Otsuki will take a position on Gibson's board.
Gibson also owns KRK, Cerwin-Vega! and Stanton.
The partnership is subject to Japanese regulatory approval, the negotiation of definitive agreements, and financing approvals from lenders, the companies said.
In November, Onkyo restated its forecasts for sales and earnings for the fiscal year ending March 31, 2012, reducing its sales forecast to 51 billion yen ($665.1 million) from a previously forecast 57 billion yen and forecasting a 300 million yen ($3.91 million) net loss compared to a previously forecast net profit of 200 million yen ($2.61 million), according to Reuters. The exchange conversions are based on a rate of $1=76.7 yen.
"This partnership has significant positive implications for Onkyo as we are always seeking ways of creating new value," said Onkyo's Otsuki. "Gibson is a leading global company with a massive fan base, best-in-class products and superior marketing skills. Coming together in this way opens the door for amazing opportunities for both companies and, more importantly, fans of Onkyo and Gibson."