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Friday, July 27, 2012
Terumo proposing Olympus integration
Medical equipment maker Terumo Corp. said Thursday it has proposed integrating its management with Olympus Corp. through a holding company, with an eye to creating the fifth-largest company by sales in the global medical equipment market.
Terumo joins companies including Sony Corp., thought to be the front-runner, bidding to form a business and capital alliance with the camera and medical equipment maker damaged by an investment loss coverup scandal.
"Terumo has been proposing to Olympus a ¥50 billion capital alliance and the launch of a committee for establishing a joint holding company in the future," Terumo said in a statement. "The integration will make a world-leading company in the area of minimally invasive treatment."
Terumo, which currently has a 2.1 percent stake in Olympus, noted that no agreements with Olympus have yet been reached.
Listed companies rarely publicize a proposal for integration involving a corporate buyout and realignment before reaching an agreement. The announcement seems to indicate Terumo wants to obtain support from Olympus' shareholders.
A leading maker of such medical products as catheters, Terumo insisted the synergy between the two companies would allow Olympus to "form the most appropriate business and technology alliance in various areas."
An Olympus official said the company has "received proposals from several companies, including Terumo, but nothing has been decided."
Sony is aiming to enhance its medical business as it faces the need to rebuild its mainstay electronics business.
The electronics giant is considering equipping Olympus endoscopes with its image sensors, while boosting cooperation in the digital camera business, which Olympus is planning to restructure.
Olympus admitted hiding ¥117.7 billion in investment losses dating back to the 1990s. The scandal broke when Michael C. Woodford blew the whistle on dubious acquisitions by Olympus in the wake of his dismissal as president and CEO.
Olympus is currently making arrangements to receive about ¥50 billion in capital from Sony, according to sources, while Fujifilm Holdings Corp. has also called on the company to form a tieup.