Sound United terminates acquisition of Onkyo home AV business
In May this year, the two companies said the completion of the transaction was subject to several conditions, but they have now “mutually agreed” to terminate the transfer as “it is in the best interest of both organisations”.
“After months of rigorous work and negotiations, it became apparent that all of the necessary closing conditions could not be satisfactorily achieved,” a statement from Sound United said.
Onkyo agreed to assign its Home AV related business to Sound United in order to focus its business resources and technology in the two areas it believes to have strongest growth potential – Digital Life portable products and OEM products and services targeting the B2B space.
On 26 June 2019, the agreement and transfer between Onkyo and Viper Holdings, the holding company of Sound United, was approved by Onkyo shareholders.
Last week, however, both companies announced that all of the necessary conditions, including the finalisation of all definitive agreements, completion of satisfactory due diligence, securing of committed financing and various other required approvals, would not be achieved by 30 November, the expiration date of the agreement.
Onkyo said it still believes in the value of combining these businesses and will remain open to future discussions should conditions change.
“The impact on Onkyo’s consolidated financial results for the fiscal year ending 31 March 2020 due to the events leading up to and the termination of this transfer is currently being evaluated,” the company said in a statement.
“In order to further invest in its business and reinforce the group’s overall financial health, Onkyo is actively raising new financing, considering new alliances and making long-planned internal changes, which were put on hold for this transfer, to improve its profitability and competitiveness.”
Meanwhile, Sound United said it remains dedicated to its mission of Bringing Joy to the World Through Sound. “We will continue to pursue this mission through organic growth with our existing brands and through opportunistic acquisitions which allow us to better serve the consumer.”