View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
April 27, 1988

PRESSURE GROWS FOR ZENITH TO DIVEST ITS CONSUMER ELECTRONICS BUSINESS

By CBR Staff Writer

Taking together the fact that the company’s Data Systems people were chortling the other day over the fact that their group surpassed the parent’s venerable consumer electronics business in terms of sales last year (CI No 914), and that Standard & Poor’s cut its rating on the company’s debt because margins in Data Systems were insufficient to make up for losses in the consumer side (CI No 913), and it is clear that there is a big question mark hanging over the future of Zenith Electronics Corp’s consumer business. And the issue boiled up at the company’s annual meeting the other day: the New York Times reports that the company did not give a direct answer to a question about whether the consumer unit was for sale, fuelling further speculation that Zenith, the last surviving US manufacturer of television sets with 13% of the domestic market, is about to shed that business. Pressure is coming from several quarters too: not only is the $1,100m-a-year consumer business – estimated to have lost $50m to $60m last year and another $19m in the first quarter – up from $10m in the same quarter last year – a growing drain on the company’s resources, but it is depressing the share price: the stock is currently trading at around $20 a share where on break up, assets less liabilities come to about $37 a share. That means that unless Zenith moves to stem the losses in the consumer division, it is wide open to a hostile bid. Who could it persuade to take the consumer business off its hands? The Times suggests Thomson SA, Philips NV or South Korea’s Daewoo Ltd. Zenith’s first quarter figures are in Company Results, alongside.

Topics in this article :
Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU