Sony ties up with Olympus, takes 11 percent stake

Associated Press Modified: September 28, 2012 at 5:46 am •  Published: September 28, 2012
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TOKYO (AP) — Sony is expanding its sprawling electronics to movies business empire with a new venture — looking inside the human body.

The company on Friday said it will spend 50 billion yen ($640 million) for an 11 percent stake in Olympus Corp., an embattled maker of endoscopes, which are the long thin camera-equipped instruments that allow medical professionals to peer inside the body.

The deal was widely expected as Sony president Kazuo Hirai had expressed interest in moving into the medical equipment business.

Olympus Corp. is the world's biggest maker of endoscopes and is also known for its cameras. It has been on shaky ground after its British chief executive Michael Woodford turned whistleblower and helped unearth a scandal involving a systematic cover-up of massive losses.

Sony Corp. has its own problems and is hoping new businesses will be part of its turnaround. Sony has reported losses for four straight years as it fell behind in portable music players, flat-panel TVs and smartphones. Sony's red ink for the latest fiscal year through March was the worst in its 66-year history.

The two companies said they will set up a new medical equipment company together later this year, 51 percent owned by Sony and the rest by Olympus.

The alliance between Sony and Olympus will focus on the camera business as well, and both sides can benefit from sharing their technology, and working together to become more competitive, they said. In such alliances, companies can share in procurement on parts, boosting their bargaining power with suppliers and lowering costs.

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