Apr 1, 2002 12:00 PM
Marantz Japan Inc. and Denon Ltd., along with their largest shareholders, Royal Philips Electronics (49 percent) and Ripplewood Holdings LLC (98 percent) respectively, announced the formation of a new holding company called D&M Holdings Inc. to merge the operations of Marantz and Denon. Expected to close by May 2002, the merger will preserve the independent Marantz and Denon brands while creating a global leader in the premium home theater and audio and video market. D&M Holdings will employ 1650 people worldwide and will succeed Marantz as a publicly traded concern on the Second Section of the Tokyo Stock Exchange.
“The combination of Denon and Marantz, backed by world-class companies such as Ripplewood Holdings and Philips, establishes a platform on which we intend to build a world-class company in the premium A/V space,” said Tatsuo Kabumoto, CEO of Marantz. “Marantz regards the establishment of D&M Holdings as yet another important strategic step forward for the company following its acquisition of trademark rights and sales subsidiaries operating in the United States and Europe from Philips last May.”
Mitsushige Sakamoto, CEO of Denon said that by integrating Denon's digital A/V technology with Marantz's video and wireless technology, D&M Holdings will secure its position as a leading competitor in the home theater market.
D&M Holdings Inc. will establish a new head office in Sagamihara City, Japan, with Kabumoto as the new president and CEO of the company. Sakamoto will be installed as the new president and CEO of Denon, and Takashi Sato will serve as the new president and CEO of Marantz. All shares of Marantz and Denon will be transferred to D&M Holdings, making Denon and Marantz wholly owned subsidiaries. Marantz shareholders will receive one share of D&M Holdings per share of Marantz stock, and Denon shareholders will get 0.4416 shares for every share of Denon stock. Ownership by Marantz shareholders and Denon shareholders in D&M Holdings will be 30 percent and 70 percent respectively, which means Philips and Ripplewood will have stakes of 14.7 percent and 68.6 percent in the new company.
Following the establishment of D&M Holdings the company will combine R&D, production and purchasing and financial control activities to reinforce its competitive edge. The Denon and Marantz brand names will be maintained, as well as their sales and marketing and brand-specific product and unique distribution channels.
Although primarily involved with consumer market product development and sales, Marantz and Denon manufacture products that are used extensively in the professional audio marketplace, both in audio and video. The synergy (and shared technologies) between the brands should expand the company's opportunities in the permanently installed professional system marketplace. The synergy between the brands should expand the company's opportunities in the permanently installed professional system marketplace.
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