Hitachi Ltd. said Wednesday it will launch a tender offer on Oct. 25 to acquire a controlling stake in Clarion Co., a leading maker of car audio and navigation equipment, to boost the group’s sales in the growing car information systems market.

Hitachi, already the top shareholder in Clarion with a 14.4 percent stake, offered 230 yen per share — a 55 percent premium over Tuesday’s closing price of 151 yen and 33 percent higher than the shares’ average price over the past three months — in an effort to acquire more than 50 percent of Clarion stock and make the firm a consolidated subsidiary.

Hitachi said it will spend up to 55.7 billion yen on the tender offer.

Clarion’s management approved the proposal by Hitachi at a board meeting the same day.

Hitachi obtained its 14.4 percent stake in Clarion in December 2004 in a tieup to develop and sell car audio and navigation systems.

Hitachi, whose car information systems unit logged 44.4 billion yen in sales in fiscal 2005, hopes to boost that figure to 290 billion yen by fiscal 2010.

Clarion had sales of 184.1 billion yen in fiscal 2005.

“We have positioned the car information systems as one of our pillar businesses,” Hitachi President Kazuo Furukawa said at a joint news conference with his counterpart at Clarion, Tatsuhiko Izumi.

“It is essential to integrate our business in order to reinforce our planning, development and sales force in car information systems,” Furukawa said. “We hope to expand our car information system business through the integration.”

Clarion’s Izumi also stressed the importance of the Hitachi acquisition.

“The alliance with Hitachi will make our global business easier because we can benefit from economies of scale offered by (Hitachi’s) size,” Izumi said.

“Hitachi will respect our independence in management and allow us to maintain the Clarion brand, while keeping our company listed (separately on the stock market).”

Hitachi said it has no intention of making Clarion a wholly owned subsidiary, saying the two firms will strengthen ties while respecting each other’s independence.

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