Leaving Matsushita and merging with Kenwood — the end of the company (2007)

Why a distinguished name could not choose where it belonged

The heart of this merger is that a company in trouble had to leave the route of its own rebuilding to its parent’s decision to sell. Matsushita held Victor stock for years with little synergy to show for it, looked for a buyer once results turned down, and after talks with a fund broke off settled the company on the smaller Kenwood. From Victor’s side, for all that it was an independently listed company, there was little room to decide for itself whom to join and where to belong. The entrance in 1954, when it accepted Matsushita’s capital and was rebuilt, and the exit in 2007, when it left Matsushita to be received by other capital, form a pair in the character of a company that has an owner.

A firm one-fifth its size in revenue taking in a large company looks anomalous, but the judgement behind it valued a record of restructuring over scale. Both Matsushita and Sparx were betting on Kawahara Haruo, who had rebuilt an insolvent Kenwood. That said, given how hard JVC Kenwood found it to escape a shrinking equilibrium after the merger, it is difficult to say the merger gave a final answer to the question of under whose capital a distinguished name’s technology and brand should be put to work. What a company with strong products but no say over where its capital belonged demonstrated in its last reorganisation was the problem it had carried since its founding: that independence means something only when capital stands behind it.