Sound United pulls plug on Onkyo/Pioneer deal

Deal goes south

by Andy Bassett

Sound United is home to a great many well known and respected audio brands and in May 2019, an interim announcement was made that Onkyo would be joining the fold. That appears to have changed now.

Sound United has many brands under its wing including Denon, Marantz, Polk Audio, Classé, Definitive Technology. The Onkyo Corporation’s Home Audio Division would have added the Pioneer, Pioneer Elite, and Integra brands. However, things have not worked out and the deal is now off.

At the time of the initial announcement, there were still many elements to smooth out such as the finalization of agreements, completion of satisfactory due diligence, and securing of committed financing. Clearly, this has not been plain sailing.

Sound United’s press release is below:

At this point, we have mutually agreed that it is in the best interest of both organizations to terminate the proposed acquisition. After months of rigorous work and negotiations, it became apparent that all of the necessary closing conditions could not be satisfactorily achieved.

Sound United remains dedicated to our mission of Bringing Joy to the World Through Sound. We will continue to pursue this mission through organic growth with our existing brands and through opportunistic acquisitions which allow us to better serve the consumer
.”

At the time of the original announcement, there were some concerns about having so many audio visual firms all dealing in closely related products, under one roof. For example, Denon and Marantz, already part of the Sound United group, both already had products in the AV receiver category that were popular and well-respected. Adding Onkyo and Pioneer’s AVR ranges to the fold caused industry observers to speculate whether there would need to be significant changes in some of the companies’ individual product portfolios to prevent then from cannibalising each other in the marketplace. Such changes could have stifled innovation and would possibly have led to job cuts.

That speculation can now be put to rest.

What do AVForums members think of this unexpected change?

Source: Press release
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