Matsushita to sell 17 percent stake in JVC

Matsushita Electric Industrial Co. Ltd., Tokyo, Japan, decided not immediately sell its majority stake in the subsidiary, Victor Co. of Japan, reports The Wall Street Journal. Matsushita, known for its Panasonic brand, has been under increasing pressure by investors to cut its losses in Victor, known as JVC. The company had initially planned to sell most of its 52.4 percent stake, but on Tuesday said it approved JVC's decision to sell a 17 percent stake to rival Kenwood Corp. by issuing new shares that would dilute its own stake to 36.8 percent.

JVC and Kenwood, which specializes in car audios and navigational devices, said they plan to consider merging their operations eventually, reports The Wall Street Journal, but the deal initially does little more than allow Matsushita to remove JVC from its consolidated earnings report. Under the terms of the deal, JVC will issue ¥34.9 billion (US$289.5 million) worth of new shares to Kenwood and Sparx Asset Management, a major Kenwood shareholder, giving them a combined stake of about 30 percent. The move reduces Matsushita's stake to less than 50 percent, which means it is no longer obligated to treat JVC as a consolidated subsidiary.