Olympus 2008 Annual Report Download - page 13

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Furthermore, we are planning to implement the
“cross-sell” method in the new structure. With the aim
of fully capitalizing on the synergies to be gained from
business integration, Olympus will sell Gyrus electro-
surgical knives to Asian and European customers, and
Gyrus will sell Olympus flexible and rigid surgical scopes
to North American customers. Through this cross-selling
agreement, we expect to expand sales opportunities.
Given its strong brand power, Olympus will maintain the
Gyrus ACMI brand to promote Gyrus’ inclusion in the
Olympus Group.
Through this business integration, we also expect to
enhance efficiencies in the administration, manufactur-
ing, distribution and purchasing sectors.
5.
Finally, what makes you so sure
that integrating Gyrus will be a success?
> Olympus conducts business operations in a variety of
areas in the surgical field. This acquisition has expanded
our market share, particularly in the areas of urology
and ear, nose and throat (ENT). Based on an in-house
analysis, after the business integration we will have
an over 50% share—the world’s largest—of the total
market for urological endoscopes, covering Japan, the
United States and Europe. Our ENT endoscopes will
also boast 30% of market share on a global scale. These
achievements will enable us to compete with other
major players in the industry. We spent approximately
¥210 billion for this acquisition, which to us was not an
unreasonable price. We will face a number of hurdles
in fully capitalizing on the synergistic effects of this
acquisition. However, we are hopeful that we will be able
to overcome those hurdles and enhance sales and busi-
ness efficiencies to get a full return on our investment.
The acquisition of Gyrus will bring significant growth
potential for Olympus in the surgical field.
At the moment, we are estimating a synergistic
effect of approximately ¥350 billion sales over the 10
years from fiscal 2009 to 2018. On the other hand, we
expect to gain an estimated ¥38 billion from business
streamlining over the same period. By reinforcing the
surgical business on a global scale, we are confident
that we have secured a foothold for future growth in the
Medical Systems Business to add to our strong perfor-
mance in gastroenterological endoscopes. The medical
equipment industry is one of constant development
and improvements in treatment. Given this, Olympus
will take maximum advantage from this acquisition
to realize better medical care—which being a leading
medical equipment company we see as our mission—by
providing treatment technologies that are more patient-
friendly, reliable and efficient.
Haruhito Morishima
President, Olympus Medical Systems Corp.
OLYMPUS 2008 11