Wednesday, July 25, 2007

Matsushita makes it go away

Matsushita's partial sale of JVC is a perfect example of how Japan Inc. is still unable to execute genuine restructuring, instead taking tiny muddled steps which don't accomplish anything. CEOs look at these annoying problems (total lack of scale and competitiveness) and want to just make them go away. To make the contrast between what IS being done and what NEEDs to be done, in this case Matsushita rejected an offer by TPG to buy JVC and execute a full restructuring. Instead Matsushita reduced their ownership stake from 52.4% to 36.8% (to get the pig off the income statement) while Kenwood and Japanese hedge fund Sparx (developing a role as the white knight for besieged takeover targets) take 17% and 13% respectively. Who will be responsible for JVC now? Will Kenwood and JVC consolidate? Er... well... consensus not yet reached on those minor points...

The head line in the Nikkei Financial says it all:

JVC-Kenwood Tie-Up Leaves Some Scratching Their Heads

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