Olympus, Sony put off medical device joint venture
Sony ($SNE) and Olympus ($OCPNY) made headlines in September when they announced plans to partner and develop medical devices, but those ambitions will have to wait for next year as the two face a delay over anti-trust sign-offs.
Sony is investing $645 million in the Japanese company to kick off a partnership that will market endoscopes and other med tech, but The Wall Street Journal reports that the two are facing a prolonged process in securing anti-trust approval in China and one eastern European country, possibly because of the increasingly fraught relationship between Japan and China. As a result, the two likely won't be able to get started until next year, according to the newspaper.
Once they can launch their collaboration, the deal will likely be a balm for two tech giants facing diverse woes. Olympus is still climbing out from under the bad PR spurred by an accounting scandal that became public last year, and Sony is grappling with a slumping video game unit and losses in its TV department.
Olympus is already the world leader in endoscopes, and Sony is a heavyweight in digital imaging, so the combined R&D know-how could lead to some successful device development. However, as WSJ pointed out back in September, neither company boasts a proud of-late record of good management or revenue growth, and the paper dismissed them as an "anemic duo" reaching into the device world in hopes of reversing their fortunes. Furthermore, analysts have openly questioned Sony CEO Kazuo Hirai's decision-making, worried that he's throwing good money after bad with his new focus on medical technology.
While the JV, whenever it gets off the ground, is unlikely to solve all the problems of the two magnates, it does position them to cash in on the growing market for imaging and other hospital-based devices in Asia.
- read the WSJ story