Yamaha completes acquisition of Bosendorfer piano: will maintain Vienna production and unique piano designs, but will reassess global sales & marketing.

YAMAHA FINALIZED ITS acquisition of Bosendorfer, the famed Vienna-based piano maker, from Bawag Bank, on December 20, 2007. The final price will be determined by an audit of B6sendorfer assets and operations. However, estimates place it at approximately $21.0 million. The purchase brings together two companies on opposite ends of the piano making spectrum. With 2007 production of 93,700 units, valued at approximately $550 million, Yamaha dwarfs Bosendorfer, which built just 300 units at its Vienna factory. In announcing the acquisition, Yamaha CEO Mitsuru Umemura stressed that both piano businesses would continue to operate independently and that the Bosendorfer factory in Vienna would be maintained. However, he said that combining Yamaha's manufacturing, marketing, and management expertise with Bosendorfer's craftsmanship, tradition, and tonal quality would strengthen both businesses, and that the combined enterprise would be better equipped to address the growing global market for premium pianos.

Umemura stressed that Yamaha is committed to preserving Bosendorfer's unique tonal quality and that there were no plans to alter the handcrafted manufacturing process or shift production outside of Vienna. He said that "Bosendorfer's manufacturing facilities, which are the basis for the company's craftsmanship, are in solid condition," adding, "Craftsmanship resides in people. We will sustain the current employee group as part of our plan to carry on Bosendorfer's technology and skill." Yamaha will work to incorporate its Disklavier player-piano technology, and "Silent Piano" technology into the Bosendorfer product line.

Bosendorfer production peaked in 1999 at slightly over 500 pianos. Since then, the company has struggled financially, selling approximately 300 units yearly. Umemura said that Yamaha's global sales and marketing expertise would immediately be applied to increasing Bosendorfer sales to previous records. However, he emphasized that sales would not be automatically turned over to Yamaha's worldwide network of distribution subsidiaries. "We are going to examine all our distribution contracts on a case-by-case basis to determine the best course of action," he said. Given that Bosendorfer's exclusive distributor in Japan recently filed for bankruptcy, he left open the possibility that Yamaha's Japanese dealers could soon be representing Bosendorfer pianos.

Yamaha has long addressed the concert piano market with its CF series of grands. The latest model, the CF-III, has won praise from a broad cross-section of pianists including Chick Corea, Elton John, Abbey Simon, and Norah Jones. How will Yamaha manage its concert operations alongside Bosendorfer, which also has a lengthy artist roster? Umemura again stressed that the two lines would operate independently. He said, "The positioning of Yamaha pianos and Bosendorfer pianos is completely different. The two pianos are built to satisfy completely different tastes. By combining the two product lines, we will be able to satisfy the needs and tastes of a wider spectrum of performers."

Founded in Vienna in 1828 by Ignaz Bosendorfer, Bosendorfer piano achieved acclaim a few years later when virtuoso Franz Liszt said it was his favorite piano because it was the only instrument that could stand up to his vigorous playing style. The piano company soon became an integral part of the rich Viennese musical tradition. Bosendorfer remained in family hands until 1907, when it was sold to Carl Hutterstrasser, an employee. In 1996 the company was acquired by Kimball Piano & Organ, which hoped to use Bosendorfer's reputation to enhance the image of its American made pianos. Kimball exited the U.S. piano business in 1988 and sold Bosendorfer to Bawag Bank of Austria in 2002.