Teac Australia, who is owned by TT International, claims they have a 20 year license to use the Teac brand name in Australia.
None of the Teac products sold in Australia are designed or made by Teac Japan, the Company that Gibson Guitars has bought into.
Last year Gibson Guitars acquired a 51% shareholding in Onkyo, a move that could now see the company transition to share resources between the two Japanese companies.
Gibson is buying 157.4 million Teac shares at 31 yen per share, or $51.8 million based on a conversion rate of 94.1 yen to the U.S. dollar.
The transaction, representing Gibson's largest investment to date in another company, was unanimously approved by both companies' boards of directors.
Peter Burnham, the Marketing and Sales Director at Teac Australia, said that he became aware of the deal late last week. "We have a 20 year licence to use the name; I do not know whether the licence is mutually exclusive or whether Teac will start marketing a range of audio gear in Australia. It is an interesting development".
Late last year Gibson Guitars knocked back the opportunity to buy into the struggling Australian-run Billy Hyde retail chain, which was eventually placed into Administration. The US Company, who is looking to expand their operation in the Asia Pacific region, is now believed to be looking at several other opportunities in the region.
Gibson, who purchased a stake in Onkyo USA's parent in 2012, offers pro audio equipment and musical instruments. Teac offers a range of products including pro and consumer audio, broadcast equipment, medical equipment, in-flight entertainment systems and recordable optical discs.
Gibson believes that in several countries, the three companies have an opportunity to work together to reduce costs, Gibson and Teac said in a prepared statement.
Gibson stands to benefit from Teac's technology, and Teac stands to benefit from Gibson's "marketing and distribution strength," said Gibson chairman/CEO Henry Juszkiewicz.
Teac president Yuji Hanabusa said "We can work together to reduce costs and bring benefits to all three parties." Although Hanabusa said he had no concrete examples yet to offer on cost savings, he said the combination of companies "will be a huge benefit to all of us."
In their prepared statement, the companies said Gibson can "leverage Teac's R&D expertise to develop a new pipeline of products for Stanton DJ in the pro audio field, as well as in the [musical instrument] and fretted instruments segments for further product development."
The statement also said the deal will expand "the size and reach" of Gibson's pro audio business with products that both complement and build upon [Gibson's] KRK, Cerwin-Vega!, and Stanton portfolio of world-class studio monitors, sound reinforcement equipment and DJ gear, respectively, "in addition to the premium consumer electronics of strategic partner Onkyo Corporation."
The deal is "yet another step in Gibson's aim to become the largest music and sound business in the world," the statement said.