CBS Inc. Finalizes Sale of Fender to Investors

As expected, CBS Inc. has sold its Fender Musical Instruments subsidiary for an unspecified amount of cash to a group of investors led by the president of the Anaheim unit, the entertainment conglomerate said Wednesday.

The previously announced transaction puts to rest fears that Fender, maker of the electric guitar that has been a mainstay among musicians for decades, might have to go out of business or be sold to a Japanese company because of foreign competition and a shrinking guitar market.

Fender officials said Wednesday that the company has cut its work force to about 100 as part of a plan to tailor its size to the smaller market and to shift manufacturing overseas. In 1981, Fender employed 700 and as recently as last month had a staff of 250.

When CBS announced last month that it had agreed to sell Fender to an investment group that included Fender President William Schultz and other key management officials, many dealers and others in the music industry expressed relief.

At the time Schultz said, “This is an opportunity to keep a very viable and legendary name alive in the industry.” Schultz said Wednesday that he just returned from finishing the paper work on the deal at CBS’s headquarters in New York and that the sale closed Monday night. Under the arrangement, he will become chairman and chief executive of Fender.

To Buy Other Lines

In addition to the Fender guitar, which is the company’s leading product, the investor group agreed to purchase all other Fender lines, including Rhodes pianos, Rogers drums, Fender strings, amplifiers and public address systems and Chroma and Polaris synthesizers.

Schultz said Wednesday that Fender is “regrouping and charging full steam ahead with marketing.” Within four months, he added, Fender will move out of its corporate headquarters, which CBS said it plans to sell. He said the company is negotiating a lease on a 60,000-square-foot facility in Brea.