Under the terms of the agreement, Sony and Olympus will form a joint venture to manufacture endoscopes and other equipment for physicians and hospitals. Sony will purchase 11.46% of Olympus shares, becoming the company’s larges shareholder.
Olymus will own 49% of the medical device joint venture, while Sony will have the controlling interest.
Shares of Sony fell more than 2% in Friday morning trading in New York.
Sony will acquire two tranches of Olympus shares by the end of February, including an initial tranche of 13.1 million shares followed by a second tranche of 21.3 million shares. The two waves of share purchases were designed to comply with regulatory requirements.
The new business venture is in line with Sony CEO Kazuo Hirai’s plan to extend Sony into the medical device market. Currently, Olympus controls 70% of the endoscope market.
For its part, Olympus, whose reputation in Japan was shaken by revelations of a long-running accounting scam earlier this year, needs a cash infusion.
In the wake of the accounting scandal, Olympus was forced to restate year’s of financial statements, slashing its net assets by $1.3 billion and dismissed its board of directors.