Olympus, Sony Postpone Joint Venture Indefinitely

Sony (Tokyo, Japan) and Olympus (Tokyo, Japan) are indefinitely delaying their partnership to develop new endoscopes and other medical devices, due to Chinese regulatory issues.

The joint venture was launched on September 28, 2012, when Sony invested JPY 50 billion (USD 532 million) to become Olympus' biggest shareholder. But delays in implementing the joint venture have cascaded since then, principally due to a prolonged regulatory process in China, and difficulties securing antitrust approval in Eastern Europe. The launch date was postponed to April 2013, but that date has now been postponed indefinitely.

Unnamed sources confirmed to the news agency AFP that the delay was linked to Chinese regulators, at a time when Tokyo and Beijing are embroiled in a tense territorial spat over an island chain in the East China Sea. According to the same sources, regulatory delays involving other Japanese firms have been linked to hold ups from the Chinese watchdogs, including the USD 4.8 billion takeover of Aegis media group by Japanese advertising firm Dentsu (Tokyo, Japan), and a merger between steelmaker JFE Holdings and Japanese heavy machinery firm IHI.

“The examination by the relevant authority is taking longer than expected, but we understand the examination process is currently in its final stage. Olympus and Sony expect to announce establishment of the medical business venture promptly after the establishment date is fixed,” revealed a joint update on the status of the medical business venture.

The alliance is seen as beneficial to both technology giants, who are confronting various financial and public challenges, including Sony's push to expand into new areas to counter video game and TV sales losses, and a decade-long USD 1.7 billion accounting problem at Olympus exposed in October 2011.

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