Shimano Inc. Purchases All of EGS's Patents

CHATELLERAULT, France (12 July 2000)--Shimano Inc. has purchased all the patents of former French component manufacturer EGS at a public auction that took place yesterday in Chatellerault. The patents acquired include those for the Synchro Shift, the Up Cage rear derailleur and gearbox casing and the Flash Hub. Shimano paid FRF1.65 million (US$232,000). "We spoke with several component manufacturers over the past few months, but Shimano was the one to make the final offer," says former EGS president and founder Christian Gauthier, reflecting aloud on the irony of a competitor taking over all of its innovations at a bargain price. Gauthier adds that the former EGS team was infected with melancholy after the auction. "But I told them this was a positive thing for the company because it justifies all the hard work we have put into developing innovative products." Shimano's European PR officer Xavier Nicolas, who was present at the auction in France, said that Shimano was the only company to make a bid. "We bought the entire patent package basically because the auctioneers didn't give us any other choice. It was everything or nothing. In the end we think we got a pretty good deal." Asked whether Shimano bought the patents simply to avoid them falling into the hands of potential competitors, Nicolas says, "We wouldn't have bought them if we didn't want to use them. Yet since the purchase was only yesterday, we have yet to decide on a clear-cut plan as to what we are going to do with them." Gauthier said that he is currently working on a return to the bike industry. "In the next few months we will acquire a few European component manufacturers," he says. "We think there is room to consolidate two or three of these producers and create one organization that will be able to compete against big players like Shimano." Gauthier did not name any names. The auction continued today and involved EGS's remaining stock and its control panels. (JW)