Pioneer Finds a Buyer for It's A/V Business: ONKYO!

Nearly a month ago, Nikkei reported that electronics giant, Pioneer, was shopping its Audio Visual business with a targeted sell date of July 2014. The plan, as the report detailed, was to retain high-margin portions of its electronics business (such as car electronics and DJ equipment) while shedding home theater and other A/V products. Car electronics, alone, made-up roughly 70-percent ($3.4 Billion) of Pioneer’s 2013 electronic’s sales. Audio Visual products, on the other hand, sold slightly over $1.0 billion (about 20-percent) during the same time frame. The rumor mill had all fingers pointing at a potential buyer named Funai Electric, which is poised to lose a Philips-brand agreement to market Philips DVD and Blu-ray products in North America at the end of 2015.


Let’s just say the fingers were pointed in the wrong direction. After stalling negotiations with Funai to investigate a restructuring, Nikkei is now reporting that Pioneer is selling to a direct competitor: Onkyo. According to the reported terms, a private equity firm (Baring Private Equity Asia) is purchasing 51-percent of Pioneer Home Electronics. Onkyo, in turn, will acquire an unspecified interest. Obviously, this leaves some meat on the bone and Pioneer will retain a stake in the company. The deal should be finalized sometime in August.

Diehard Pioneer fans need not panic, yet; the Pioneer name is going to stay intact. According to Nikkei, Pioneer will continue to have their hands in the mix with future product designs, component procurement, distribution and sales. In fact, Nikkei says Onkyo will likely take advantage of Pioneer’s technologies to boost their electronics sales which were roughly a third of Pioneer’s sales last year.

Nearly five years ago, Pioneer sent ripples through the video world by announcing it was exiting from the plasma television business. This announcement brought videophiles to their knees and sent them reeling from the realization that Pioneer’s world-class Kuro displays were dead. The scariest news from this event, was the fact that Pioneer simply couldn’t make (enough) money from developing and selling the undisputed champion of benchmark display products. While not as highly reviewed as the Kuro displays, Pioneer’s A/V equipment is extremely popular and frequently enjoys solid, above-average, accolades. Eerily similar to Pioneer's television fate.

Image: Pioneer