Gibson to Pay $52 Million for Teac Stake to Tap Into Cool Japan
Stock Chart for Teac Corp (6803)
Gibson Guitar Corp., maker of instruments played by Led Zeppelin’s Jimmy Page and Green Day’s Billie Joe Armstrong, agreed to buy control of Teac Corp. (6803), saying the deal allows the company to tap into Japanese cool.
The closely held guitar maker will pay 31 yen a share for 54.4 percent stake held by funds operated by Phoenix Capital Co., Nashville, Tennessee-based Gibson said in an e-mailed statement today. The deal values the stake at 4.9 billion yen ($52 million).
The acquisition gives Gibson high-end audio equipment, data storage and sound recorders and adds to its brands that include Wurlitzer jukeboxes. The deal is the largest purchase of a Japanese company announced by a U.S.-based firm this year, according to data compiled by Bloomberg.
The acquisition will allow “us to move the industry forward,” Gibson Chief Executive Officer Henry Juszkiewicz told reporters in Tokyo, surrounded by a dozen guitars. “The vision that we have is to create a new lifestyle with music and sound.”
Teac sales slumped 28 percent in the year ended March 31, 2012, the 11th straight year of decline. The company cut its sales outlook for this fiscal year on March 22 to 22.2 billion yen, compared with 26.7 billion yen a year earlier.
The purchase also adds Cool Japan “technology and innovation” for Gibson, according to the statement. Cool Japan refers to the creative industries and culture from food to manga comics and fashion in the world’s third-largest economy.
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