Foxconn bolsters its PC credentials as its Sharp division scoops up the PC business of Toshiba
Japanese multinational corporation Sharp is to purchase Toshiba Corp’s personal computer business for a very modest $36m (£27m).
Sharp, according to Reuters, exited the PC market back in 2011, and the small purchase price of the Toshiba PC division and its highly rated laptop range, indicates the ongoing difficulties the PC industry faces.
Meanwhile it was also reported that Sharp will issue $1.8 billion in new shares to buy back preferred stock from banks, signalling its return to financial stability after it was purchased by Taiwan-based Foxconn Group (formerly Hon Hai Precision Industry Co Ltd) back in 2016.
Foxconn’s acquisition of Sharp in 2016 was the first time the Taiwanese firm had purchased a major Japanese company.
Now thanks to its ownership of Sharp, it has purchased the brand of yet another Japanese electronic giant.
The tie-up of Foxconn’s manufacturing expertise, with Sharp’s and Toshiba’s electronics savvy, was welcomed by some analysts.
Toshiba currently builds PCs at its own plant in China.
“Foxconn is a PC contract manufacturer and has a great deal of expertise and production capacity,” Hiromi Yamaguchi, senior analyst at Euromonitor International was quoted by Reuters as saying.
“This acquisition will prove a further catalyst for more Sharp and Foxconn synergies.”
Essentially, the deal will see Sharp take an 80.1 percent stake in Toshiba’s PC unit on 1 October.
The deal is noteworthy considering Toshiba’s heritage in the PC arena. In 1985 it launched the world’s first laptop PC and sold 17.7 million PCs at its peak seven years ago.
But last year Toshiba only sold 1.4 million units.
It is fair to say that Toshiba has struggled in recent years.
Last year it sold a large part of its NAND chip unit to a consortium led by Bain Capital LP, in a deal worth $18bn (£13.5bn).
It has also sold its television business to Hisense and its white-goods business to China’s Midea Group.
It has also previously struggled to contend with a possible delisting from the Tokyo Stock Exchange as well as a bitter legal tussle with Western Digital, as it sought funds to cover billions of dollars in liabilities arising from now-bankrupt US nuclear unit Westinghouse.
But Toshiba has been under intense pressure ever since early 2015, when it was discovered that it had overstated operating profits by a total of 151.8 billion yen (£780m).
Even worse, the CEO of Toshiba was found to have been aware of a profit inflation scheme going back to 2008. The CEO and a number of other executives resigned as a result.