1990: AVX Corporation Joins the Kyocera Group
Have an Altruistic Spirit
As a part of Kyocera's global expansion strategy, it acquired AVX, a major U.S. electronic components maker, in January 1990.
AVX Chairman Marshall Butler was pleased to accept Inamori's offer: "As global electronic components makers, let's join forces and contribute to the growth of the electronics industry."
The acquisition, done via stock swap, did not proceed smoothly.
Initially, the agreement was that Kyocera stock would be exchanged with AVX stock, based on a valuation of AVX stock at $30 per share. This was 50% more than its market value.
Butler, however, asked Kyocera to increase the valuation of AVX stock, making it more advantageous to AVX.
Kyocera's U.S. holding company president and U.S. attorneys, who were conducting the actual negotiation, were against Butler's request. But Inamori respected his concern for AVX's shareholders and employees and agreed to the price change.
After this, Butler made another request to raise AVX's exchange price. Again, in the midst of strong opposition from the U.S. camp, Inamori carefully considered whether Kyocera could make a profit from the acquisition if stocks were exchanged at the amended rates. Inamori concluded that it could be accomplished through concerted efforts, so he agreed to Butler's request once again.
In the end, an agreement was signed with the exchange rate of Kyocera's stock at $72 per share and AVX's stock at $32 per share.
Kyocera's decision was not made with cold calculation, but with an altruistic mind that placed the needs of AVX ahead of its own, despite the disadvantages it presented. This opened up the minds of AVX employees and goodwill spread throughout their organization. This feeling of gratitude created the basis for a positive relationship.
After the acquisition, AVX's revenue increased rapidly. They were able to re-list on the New York Stock Exchange in 1995.
The acquisition process, as well as the process that took place to re-list AVX on the stock exchange, are proof that even in business having an altruistic mindset is important, and even though it seems like you are making a sacrifice, you will be rewarded in the long run.