China’s Midea Group Co (美的集團) is to buy a little more than 80 percent of loss-making Japanese conglomerate Toshiba Corp’s home appliances arm for ￥53.7 billion (US$473 million), the two companies said on Wednesday.
Toshiba, which makes everything from rice cookers to nuclear plants, is to retain the remaining 19.9 percent of Toshiba Lifestyle Products & Services Corp, which will retain its name, the two said in a joint statement.
According to the deal, Midea is to be licensed to use Toshiba brands for home appliances for 40 years, obtain more than 5,000 intellectual-property assets and be authorized to use other related patents retained by Toshiba, it said.
Midea chairman Fang Hongbo (方洪波) said the acquisition of the Toshiba unit was “an important landmark in Midea’s globalization endeavor” and would “significantly strengthen our competitiveness in Japan, Southeast Asia and the global market.”
In the joint statement, Toshiba president Masashi Muromachi said he was “confident that Midea’s further investment in R&D, marketing and branding will bring about a brighter future for the home appliances business.”
Toshiba has been roiled by a profit-padding scandal, in which bosses for years systematically pushed their subordinates to cover up weak financial figures. It is expecting a huge loss of about US$6.4 billion for this fiscal year.
The Midea takeover is subject to regulatory approvals in China and antitrust clearances, the two firms said.
Privately owned Midea, founded in 1968, is one of China’s biggest home-appliance makers and raked in 12.7 billion yuan (US$2 billion) in net profit last year, up 21 percent from a year earlier, according to its Web site.
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