Sansui Deal Gives Japan Taste of Foreign Buyouts : Trade: A British company's purchase of a 51% stake in the ailing audio firm would mark the first time an overseas owner has gained control of a publicly traded Japanese corporation.


The first foreign takeover of a Japanese firm listed on Tokyo's stock exchange was announced Friday as executives of Polly Peck International and Sansui Electric Co. said the British conglomerate would acquire a 51% controlling interest in the famous but ailing Japanese audio products firm next January.

"All the beliefs that Japan is not receptive to an intelligent approach have been demolished," declared Asil Nadir, chairman of Polly Peck. He said the deal shows that Japan "is totally open."

Hikaru Matsunaga, Japan's minister of international trade and industry, also heralded the acquisition as a landmark that would help his nation combat its image as one whose firms acquire major properties overseas but never permit foreign acquisitions.

PPI's takeover will be the first foreign acquisition of an existing Japanese firm since the Dutch electronics giant Phillips N.V. acquired control of a small electronics company in 1980, but that firm was not listed on the stock exchange. No foreign firm currently holds a controlling share of any Japanese corporation listed on the Tokyo Stock Exchange.

The purchase, however, was far smaller than some recent Japanese acquisitions abroad.

Sansui will issue 39.13 million new shares at $2.86 (400 yen) apiece, or about one-third the present market price, and sell them all to PPI on Jan. 6 for about $111.4 million, executives of the two firms announced.

The authoritative Japan Company Handbook published by Toyo Keizai Co. describes Sansui as "a medium-standing specialized audio maker (that) excels in amplifiers." Its sales were expected to reach $185 million this year, but the firm is heavily in debt. Outstanding bank borrowings of $121.7 million exceeded its assets of $101.6 million last April.

Sansui has suffered losses consistently since 1985 and has not paid dividends for four years.

While refraining from criticizing Sony's proposed $3.4-billion acquisition of Columbia Pictures, Trade Representative Carla A. Hills, Deputy Treasury Secretary John E. Robson and Ambassador Michael H. Armacost all cited the Sony deal within the past month as an example of the kind of acquisition that American firms are unable to make in Japan.

Polly Peck's businesses include food, electronics, textiles and leisure. It announced last month that it would pay $875 million for RJR Nabisco's Del Monte Tropical Fruit Co. fresh fruit operation.

Acquisition of Sansui, which holds a Japan Victor license to manufacture videocassette recorders, will give PPI's electronics division a "globally recognized brand name" for exports as well as access to the Japanese consumer market, Nadir said. Until now, Sansui has not exercised its right to produce VCRs.

Ryosuke Ito, Sansui president, said Sansui will manufacture compact disc players at plants it owns in Hong Kong, Taiwan and Singapore and will start production of both VCRs and facsimile machines in Japan next year.

With the new production, the company hopes nearly to quadruple sales to $714 million (100 billion yen) in five years, Ito said.

Nadir and Ito announced that Ito will stay on as president while a former Toshiba executive will be brought in as a vice president. PPI also will send directors to the new board. Shares in the firm will continue to be listed on the Tokyo and Osaka stock exchanges after the acquisition, they added.

Japanese newspapers reported that Sansui had sounded out more than 20 Japanese, South Korean and European electronics companies before deciding upon the deal with PPI.

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