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September 29, 2012

Official now: Sony will invest in Olympus ($630 million USD, getting 11.5% voting shares)

About two weeks ago, the Japanese media caught wind of this actually happening, and it has now happened! Sony and Olympus have officially announced a partnership. Sony will invest roughly 50 billion yen ($630 million US dollars) in Olympus in the form of new share purchases. This will give Sony over 34 million Olympus shares, which result in Sony having roughly 11.50% in voting rights shares in Olympus.

The math works like clockwork: 34,387,900 new common shares purchased at a 1,454 yen per share = 50 billion yen.

It is important to note that the driving force behind this appears to be medical devices, not digital imaging. A new business venture in the world of medical devices will be established with Sony holding 51% and Olympus holding 49%.

However, this is not a medical devices blog, so we will focus on the digital imaging aspects of this development...

What is mentioned in the press releases below was also re-affirmed by an Olympus representative contacted by AP UK.

In other words, at least for now, based on what has been announced, this appears to be more of a nuts and bolts and infrastructure and cost savings type of a partnership digital-imaging-wise. But as always, only time will tell...

Interesting Quotes from the Official Press Releases
In the official press release, the Olympus President is quoted as saying: "In the field of digital cameras, we will seek to achieve collaboration in a manner that further improves the competitiveness of the two companies"

In the official press release, the Sony President is quoted as saying: "We also believe there are many potential opportunities for collaboration between Olympus and Sony's digital camera businesses, and are confident that by building on our respective strengths we can also enhance and grow our presence in this market"

Further down the press release, under "2. Purpose of Business and Capital Alliances", it says:

"The two companies also aim to enhance their competitiveness, primarily in the area of compact digital cameras, by exploring opportunities for mutually beneficial transactions and collaboration between their respective camera businesses, including the supply of Olympus technologies such as camera lenses and mirror cells to Sony, and the provision of Sony image sensors to Olympus"

On the Internets
Official press release at Sony and Olympus (17-page PDF).

Discussion at Imaging Resource and dpreview.

Photographer discussion in the dpreview post comments and dpreview NEX forum and dpreview Sony SLR forum and dpreview Olympus SLR talk.

Coverage in the tech world and newspapers can be found organized via Techmeme.

Business announcements behind paywalls: WSJ and FT.

Should Panasonic press the Pana-Panic button?
Sony and Panasonic are rivals in many segments of the market, so I am sure the Panasonic Hierarchy is not sitting on metaphorical plushy cushions as this deal is taking place. Panasonic had a chance to invest in Olympus but they didn't. Perhaps their finances or their strategy was not a good match.

On the other hand, a lot of electronics manufacturers have frenemies relationships, so this is not necessarily a dramatic development from their perspective. Even Samsung and Apple had a strong relationship before Samsung started up the iPad copy machine ;-)

Perhaps this was one of the reasons Panasonic was developing a lens line-up in parallel to Olympus, instead of coming up with a unified system-wide initial lens line-up?

In a theoretical worst case scenario of Olympus folding up Four Thirds and Micro Four Thirds, Panasonic could simply continue M43rds on their own. They existing Olympus M43rds lenses and cameras won't magically disappear and Panasonic can keep on building from there.

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