U.S. guitar maker Gibson to buy China piano factory http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyID=2006-12-13T112801Z_01_SHA39194_RTRUKOC_0_US-GIBSON-CHINA-PIANO.xml
Wed Dec 13, 2006
By George Chen
SHANGHAI (Reuters) - U.S. guitar maker Gibson will acquire China's state-owned Dongbei Piano in a move aimed at boosting its brand and sales in the world's fourth-largest economy, industry sources said on Wednesday. Gibson, famous for its branded guitars, which have been popular for decades among global artists from the Beatles' John Lennon to Irish band U2, will acquire all of state-owned Dongbei Piano (Group) Co. in northern China, said sources involved in the deal.
Gibson will pay several hundred million yuan for the purchase and an official announcement will be made on Thursday, they said.
A Gibson spokesman in China declined comment on Wednesday. "The Chinese factory can help Gibson reduce its global production cost and definitely boost its brand reputation in China," said one source.
Gibson produced its first electric guitar in 1935. Innovative models developed after the World War II in collaboration with jazz guitarist Les Paul have remained popular to this day and have been the preferred instrument of rock stars such as Led Zeppelin's Jimmy Page.
Gibson has already been making some of its less expensive Epiphone guitar models in its wholly-owned musical instrument factory in southern China. The price of a Gibson guitar in China can range from 500 yuan ($63.90) for an entry-level hobbyist to thousands of yuan for professional performers.
Gibson also produces Baldwin-branded pianos, which rank among the top international piano brands in China.
The sources declined to confirm whether Gibson would authorize the Dongbei factory to use the Baldwin brand for piano production and sales.
Dongbei, which means "North East" in Chinese, was founded in 1952 when it split from the Shanghai Piano Factory, the country's oldest piano maker. Musical education has become increasingly popular in many major Chinese cities including Beijing and Shanghai in the past few years, as more young Chinese pianists including Li Yundi and Lang Lang, become internationally famous.
In Shanghai, China's largest city, thousands of children take professional piano level exams every year, contributing to an industry already worth billions of yuan.
(Additional reporting by Gelu Sulugiuc in COPENHAGEN)
($1=7.83 Yuan)
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