Toshiba Corp is in talks to sell its image sensor business to Sony Corp for about ¥20 billion (US$164.6 million) to raise cash after an accounting scandal, people familiar with the negotiations said yesterday.
The companies are near a deal and might announce it as early as next week, said one of the sources, who asked not to be identified as the discussions are private.
The Japanese industrial conglomerate is selling assets to raise cash after accounting irregularities cut about US$1.3 billion off profit reported over almost seven years. The Nikkei 225 reported the talks between Toshiba and Sony earlier yesterday, without saying where it got the information.
Sony has taken the lead in global market share for chips that cameras and smartphones use to capture and digitize photos. The company is already quadrupling spending on semiconductors this year to ¥290 billion to meet demand for the sensors from customers including Apple Inc and Samsung Electronics Co.
Toshiba spokesman Tatsuro Oishi said yesterday that nothing has been decided. Sony spokesman George Boyd declined to comment.
Sony controlled about 40 percent of the US$8.7 billion image sensor market last year, compared with about 16 percent for its next biggest competitor, Techno System Research estimates. The market is forecast to climb to about US$12 billion by 2019, and the company expects its sales to increase as much as 62 percent to ¥1.5 trillion in three years.
A Japan Inc stalwart, Toshiba makes everything from nuclear power plants to laptop computers and memory chips. Last month, the company sold its stake in medical equipment maker Topcon Corp in a ¥49 billion deal for a gain of about ¥30 billion.
Also last month, Toshiba agreed to sell a 30 percent stake in a building it owns for ¥37 billion and prior to that, sold its 4.6 percent stake in Finnish elevator and escalator maker Kone Oyj, for a gain of about ¥113 billion.
Separately, the Yomiuri newspaper yesterday reported that Toshiba might reduce its workforce within Japan by a few thousand people.
Company president Masashi Muromachi last month pledged to prune underperforming businesses, including workforce reductions in appliances, PCs, televisions and semiconductors.
Toshiba had some 198,700 employees as of March 31, the lowest since at least 2009, according to data compiled by Bloomberg.
About ¥491 billion of Toshiba’s market value has evaporated since the company withdrew its earnings forecast in May and announced an accounting probe that was later expanded. The Tokyo Stock Exchange has fined the conglomerate ¥91 million for the profit misstatements.
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