Gibson Guitar Buys Majority Stake in Onkyo USA

Gibson Guitar Corp. has announced a strategic partnership with Onkyo Corp.

Onkyo's home theater and audio equipment will provide Gibson's newly-formed Pro Audio Division substantial technology resources. Gibson will provide Onkyo with its marketing resources and expertise.

Gibson will acquire a majority of Onkyo USA (Onkyo's exclusive distributor for North America and a distributor for Central and South America) and become the second-largest shareholder in Onkyo Corp.

Gibson will make a strategic investment in Onkyo, and Gibson chairman and CEO Henry Juszkiewicz will be given a position on the Onkyo board of directors. Likewise, Onkyo will invest in Gibson, and CEO and president Munenori Otsuki will take a position on the company's Board of Directors.

The two entities will form a Hong Kong-based joint venture focusing on design and development of consumer audio products. Through this alliance, Onkyo USA becomes the latest addition to the Gibson Pro Audio division, which already includes KRK, Cerwin-Vega! and Stanton.

"Onkyo makes some of the world's best audio equipment, and this partnership will give Gibson the ability to bring a deeper and more enhanced audio experience to music lovers around the world," says Juszkiewicz. "While people may be listening to more music, they are listening to it primarily in a severely compressed format. The aural disparity between a real system and compressed sound is vast, and as a result, they are simply not hearing tremendously rich sounds. With Onkyo, our goal is to bring the same exceptional experience artists demand in the studio to a larger consumer base."

"This partnership has significant positive implications for Onkyo as we are always seeking ways of creating new value," says Otsuki. "Gibson is a leading global company with a massive fan base, best-in-class products and superior marketing skills. Coming together in this way opens the door for amazing opportunities for both companies and, more importantly, fans of Onkyo and Gibson."

All agreements are subject to Japanese regulatory clearance, negotiation of definitive agreements and financing approvals of lenders.

Back in 2008, Gibson was unable to seal a deal that would have merged the company with TC Group, the parent company of Tannoy. Prior to that, Gibson had developed and marketed a high-fidelity multiroom audio system called MaGIC that never took off with custom installers.