TOKYO -- Japanese electronics maker Pioneer will sell its audiovisual equipment business to a coalition of compatriot audio equipment maker Onkyo and investment fund Baring Private Equity Asia. The sell-off is aimed at improving its profitability amid dwindling demand due to the spread of online video and music distribution.
Pioneer, Onkyo and Baring Private Equity Asia reached a basic agreement and will announce the decision later Tuesday.
Baring Private Equity Asia will buy a 51% interest in Pioneer Home Electronics, and Onkyo will acquire an unspecified interest. Pioneer will retain a stake in the company. It will decide the value of the deal later.
Sales at the Pioneer unit were roughly 108 billion yen ($1.05 billion) in fiscal 2013, about a fifth of the group total.
Pioneer has positioned the car navigation business as a key growth pillar, with the segment accounting for 70% of sales. It had been considering restructuring Pioneer Home Electronics, and held negotiations with Funai Electric and D&M Holdings about a possible sell-off.
Pioneer will work with Onkyo in such areas as product design, component procurement, distribution and sales. The products will continue to be sold under the Pioneer brand.
Onkyo will drastically review its cost structure, including in the area of procurement, by taking advantage of Pioneer's technologies. Onkyo logged sales of 36 billion yen in fiscal 2013.