Sony ($SNE) and Olympus ($OCPNY) in Japan are putting off indefinitely their highly touted partnership to concoct new endoscopes and other medical devices. The delay stems from continued Chinese regulatory snafus.
But, as Reuters reports, the delays have cascaded since both technology giants first announced their alliance in September, in the wake of Sony's decision to invest $645 million in Olympus, a global maker of endoscopes and cameras that has struggled in the wake of a massive accounting scandal that became public in 2011. Sony is now Olympus' biggest shareholder.
Both parties had hoped to begin launching products by the end of 2012. But they announced their first delay in December, a problem The Wall Street Journal attributed to a prolonged process in China and one Eastern European country in securing antitrust approval. They pushed their launch date to April, but that date will not work now either, again because of China's regulatory system.
It is a deal that should work wonders for both companies, which have struggled with varied financial and PR challenges. Their combined technological and R&D might could lead to some intriguing products. These delays will only hurt Olympus' bid to get out from under bad debt and PR problems post-accounting scandal, and harm Sony's push to expand into new areas to counter video game and TV sales losses.
- read the Reuters story