Philips and MJI Announce Measures To Strengthen Marantz Business

Royal Philips Electronics (Philips) and Marantz Japan Inc. (MJI) jointly announce that MJI intends to buy from Philips the Marantz trademark and the European and American sales organizations. The transaction is due to take effect in the coming months. In addition, Philips intends to sell 1.5% of its shareholding in Marantz Japan Inc. in due consultation with MJI, effectively reducing its share from 50.5% to 49%. These intentions are subject to Board approvals and outcome of discussions with relevant social and governmental bodies.

Both Philips and MJI believe it is important to have single ownership of the global Marantz business in order to improve its value chain. In Philips' view, taking a minority shareholding is a clear message to the market that Marantz Japan Inc. from this moment onwards solely is in charge of its strategic direction. This will open up new opportunities with the brand and its business, one of which will be investing in the brand name itself.

Marantz is considered to be the third largest premium audio/video brand in the world and has been growing consistently over the last few years. As such, it has a strong global reputation with a long and impressive history in the audio industry. MJI has been the technology and development center for the Marantz branded products for over 30 years. MJI also owns the distribution rights of the Marantz branded products in Asia, including Japan.

The European sales organizations for Marantz are in the Netherlands, UK, Germany, France and Italy. These, and Marantz America Inc., are all currently owned by Philips.

Mr. Kazuya Suetake, CEO of Marantz Japan Inc. commented: "The new situation provides Marantz with the freedom it needs to fully pursue its own interests. We are very excited about the possibilities it opens for us."

Both companies emphasize that the existing working relations will be maintained. Also, both parties expect to continue their fruitful cooperation in many fields. Kazuya Suetake: "Cooperation with Philips in areas such as Super Audio CD remain as important as they are today. We have had many successes together and we both want to continue to do so. We see more opportunities for relationships with different Philips product divisions then ever before."

MJI will finance the transaction fully with debt, taking the full advantage of the low Japanese interest rates.

Besides the Marantz branded business, MJI has ambitious growth plans for the coming years. It has concrete plans to grow its wireless data modules and satellite activities by their world class wireless technology aggressively. In both business areas Marantz Japan Inc. has a good market position and expects strong growth in 2001 and 2002 along with the rapid growth of the wireless market.