Electronics giant Sony will invest 50 billion yen ($645 million) in scandal-tainted Olympus, the firms said Friday, as they both look to turn the page on disastrous chapters. The investment will make cash-bleeding Sony the single biggest shareholder in Olympus, with slightly more than 11 percent of its outstanding stock.
The companies will also establish a joint venture to develop endoscopes, with the focus on a type used in keyhole surgery, the statements said. "At Sony we are aggressively pursuing the growth of our medical business, with the aim of developing it into a key pillar of our overall business portfolio," said Sony president Kazuo Hirai in a statement. "The business and capital alliances we have agreed with Olympus today will be integral to these plans," he said. Sony will take a 50 billion yen private placement of Olympus shares by the fiscal year-end for 1,454 yen a share.
The price represents a saving on Olympus's shares on the open market, where they closed on the Tokyo Stock Exchange at 1,520 yen. Olympus's reputation was badly damaged after its British former chief executive blew the whistle last year on an accounting scam that saw $1.7 billion worth of losses moved off its balance sheet. "Investment from Sony will help strengthen our financial base," said Hiroyuki Sasa, president of Olympus, in its statement. The alliance will enable the embattled company to "contribute to world medical progress by developing a variety of new medical devices that would not be possible by Olympus alone", he said.