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Pentax, Hoya to Merge
Hoya, Japan's largest optical-glass maker, is buying Pentax for $765 million.
By Jack Howard and Jay DeFoore
December 29, 2006
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Pentax has reached an agreement to merge with the Hoya Corporation, the largest Japanese optical-glass maker. Hoya is buying Pentax for $765 million, and the merger should be completed by October 2007.
The new combined company will be called Hoya Pentax HD. An eight-page document (download PDF) posted on the Pentax website characterizes the deal as "an integration of equals." Hiroshi Suzuki, current HOYA President and CEO, will retain his titles with the new company. Fumio Urano, Pentax's President and CEO, will serve as Chairman of the Board of the new company.
Pentax common stock shareholders will be allotted 0.158 shares of Hoya common stock per Pentax share, 10.5 percent higher than the closing price, according to Bloomberg News.
"Significant structural changes have occurred in optical equipment and related materials since the emergence of digital cameras," the eight-page document declares. "Competitors in Asia have grown rapidly and are expected to continue gaining market share through low price campaigns and increasing the added value of their products. Along with existing camera manufacturers, home appliance makers have also entered the digital camera market, further intensifying competition in this segment. In order to maintain growth capabilities, cost competitiveness must be strengthened by lowering production costs and focusing on unique, high-end products. Measured structural change is necessary to ensure differentiation in this environment."
Later on the report states that the new company will continue to "make the best possible use of the respective brands of both Hoya and Pentax" with its new business divisions, including the Imaging Systems Area, which will be "continuing Pentax's imaging systems division."
Representatives of Pentax America Imaging Company declined to comment on or clarify elements of the document at this time.
According to Bloomberg News, Pentax has experienced growth in medical equipment sales while growth in its single-lens reflex cameras business has been hampered by increased competition from Canon and Sony. Sales from the digital camera unit of Pentax are expected to decline to about 40 percent of total sales in three years, down from 51 percent this year.
Popular Photography & Imaging/PopPhoto.com will be following this merger as events develop and unfold over the coming months, and will provide factual updates as more information becomes available.
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