A year ago, Marantz gained full command over its own operations when Philips reduced its participation in the company from 50.5% to 49% by selling 1.5% of the shares to Marantz Japan Inc. (MJI).

A new development took place last week. In a joint communiqué issued March 7, MJI and its largest shareholder, Royal Philips Electronics, and Denon Ltd. and its largest (98%) shareholder, Ripplewood Holdings LLC, announced the establishment of D&M Holdings, Inc. D&M will be a joint holding company created to merge the operations of Marantz and Denon. The transaction is expected to be effective as of May 2002.

The research and development, production and purchasing, and financial control activities of the two companies are to be combined as soon as possible. The Denon and Marantz brand names will be maintained, as will their respective sales, marketing, and distribution operations.

Marantz and Denon will set up D&M Holdings with its head office in Sagamihara City, Japan. Tatsuo Kabumoto, the current chairman, representative director, and CEO of Marantz, will become president and CEO of D&M Holdings.

The ownership stake of Marantz and Denon shareholders in D&M Holdings will be 30% and 70%, respectively; Philips and Ripplewood will have respective stakes of 14.7% and 68.6% in D&M Holdings.