Sharp to buy Toshiba PC business
Osaka-based electronics maker issues $1.8 billion in new shares
Japan's Sharp Corporation has said it will buy Toshiba Corporations personal computer (PC) business and issue $1.8 billion in new shares to buy back preferred stock from banks, highlighting a swift recovery under the control of Foxconn.
The two companies said in a statement that the share purchase agreement is expected to be complete with all necessary procedures, including government approvals and the transfer of the stock, by October 1, 2018.
The acquisition of the PC business for $36m marks a return by Sharp to a market it quit eight years ago, even if its comparatively low cost underscores dwindling demand in a world where many consumers spend more money on their smartphones.
The Osaka-based electronics manufacturer will be able to use the scale of parent company Foxconn, the world's biggest contract manufacturer, to produce PCs more cheaply, just as it has done with TVs.
Sharp said it will take an 80.1% stake in Toshiba's PC unit on Oct. 1, and will retain its Dynabook brand.
Toshiba, which launched the world's first laptop PC in 1985, sold 17.7m PCs at its peak seven years ago. That has shrunk to just 1.4 million units last year.
Toshiba Corporation said over the last few years it implemented a series of measures to stabilise the Toshiba Client Solutions Co (TCS), PC business, including shifting its focus to B2B business, reviewing personnel and operating sites, and ending ODM procurement, while also investigating various strategic options with third parties.
After careful considerations, Toshiba Corporation has determined that the best way to strengthen TCS, increase its corporate value and to secure global competitiveness and continued development of the business, is to select Sharp as its partner. Accordingly, Toshiba Corporation has decided to transfer 80.1% of its TCS shares to Sharp.
Following the share transfer, Toshiba will continue to provide brand licensing for PC products and equipment designed, manufactured and sold by TCS.
Sharp was once known as a major supplier of high-end TVs and smartphone displays but struggled to compete with Asian rivals before it was bought by Foxconn.
Embattled conglomerate Toshiba Corporation sold its television business to Hisense and its white-goods business to China's Midea Group as it scrambled for funds to cover billions of dollars in liabilities arising from now-bankrupt US nuclear unit Westinghouse.
The $18bn sale of its chips business to a group led by US private equity firm Bain Capital was completed last week.
Toshiba outsourced PC production until 2015, and currently builds PCs at its own plant in China.
Additional reporting by Reuters.