Beleaguered Sony and scandal-tainted Olympus expected to ink deal

Electronics giant Sony and scandal-tainted Olympus will formally agree a capital tie-up Friday, a report said, as both companies look to turn the page on disastrous chapters.

The firms are expected to make an announcement following board meetings to approve the partnership, which will see them working together on medical equipment, the Nikkei business daily said.

Sony will take a 50 billion yen (US$645 million) private placement of Olympus shares by year-end for slightly more than 1,400 yen a share, making it Olympus’s top shareholder, with a roughly 11 per cent stake, it said.

The companies will establish a joint venture to develop endoscopes, with the focus on a type used in keyhole surgery. Sony will hold a majority stake and appoint a senior official as the new firm’s president, it said.

Olympus’s reputation was badly damaged after its British former chief executive blew the whistle last year on an accounting scam that saw US$1.7 billion worth of losses moved off its balance sheet.

The camera-maker has since announced a major overhaul that includes cutting about seven percent of its workforce, while its new boss has publicly said he is seeking a capital injection to shore up the company’s finances.