Electronics and energy giant Toshiba Corp announced yesterday plans to sell its entire stake in Japanese label Toshiba EMI to British partner EMI Group, saying that music was no longer relevant to its business.
Toshiba said it would sell its stake for about ¥21 billion (US$179 million) and complete the deal by September.
One of Japan's major music and entertainment companies, Toshiba EMI is currently controlled 45 percent by Toshiba and the remaining 55 percent by EMI, the world's third-largest music company based in London.
Toshiba accepted an offer from the EMI Group as "the music content business today is less relevant to other businesses within the Toshiba Group," it said in a press statement.
Toshiba EMI primarily handles domestic artists but also sells albums in the lucrative Japanese market of some of EMI's top acts -- most famously the Beatles.
Among its domestic artists is Japanese pop diva Hikaru Utada, whose first album First Love sold more than 8.6 million copies in Japan and 990,000 overseas, with strong sales in China, Hong Kong and Taiwan.
Toshiba has been increasingly focusing on its energy operations and in October completed the purchase of US nuclear power plant maker Westinghouse from British Nuclear Fuels for US$5.4 billion.
There is growing speculation that Toshiba, which also sold shares in Toshiba Ceramics in October, is now aiming to sell off other group companies such as Toshiba Tec as it focuses on its core areas, including electronics and energy.
"Toshiba is expected to accelerate this strategy from now on, making it different from its rivals such as Sony, which still regards content as a major pillar," said Koichi Fujimoto, an analyst at Okasan Securities.
Sony, going through a major overhaul of its business, continues to expand both its entertainment operations, such as video games and movies, as well as its consumer electronics operations.
Toshiba EMI said Shoji Doyama will remain as the head of the company, which will keep the name Toshiba EMI "for the time being."
Toshiba EMI is now under re-structuring due to a slump in sales of music software, dropping to fourth place in Japan's music sales ranking last year from second in 2004.
The world's music companies have had a tough time in recent years following a downturn in CD sales since the late 1990s.
Music piracy and the rapid growth in the popularity of music downloads from the Internet have dampened business prospects.
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