Sharp will buy Toshiba's PC business to save the company's bottom line as it pursues its mission to focus more on B2B business and restructure its organisation to ultimately save costs.
Although Toshiba transferred the PC division to its Toshiba Client Solutions (TCS) division in 2016, this move was not enough on its own, and so it sought a business to offload its PC division to.
Sharp has paid four billion yen ($27 million), despite the company closing down its own PC manufacturing business eight years ago. However, it appears to think a re-entry in the market by acquisition is a safer option than re-launching its own PC manufacturing business, especially as it will take on the TCS staff, including engineers and sales personnel.
"TCS subsequently implemented a series of measures to stabilise the business, including shifting its focus to B2B business, reviewing personnel and operating sites, and ending ODM procurement, while also investigating strategic options with third parties," the company said in a statement.
"Toshiba has determined that the best way to strengthen TCS, increase its corporate value, and also to secure global competitiveness and continued development of the business, is to select Sharp as its partner."
The deal is due to close in October and at that point, TCS will be deconsolidated from Toshiba Group completely. However, Toshiba will continue to provide brand licensing for PC products and any other equipment designed, manufactured and sold by Sharp, trading as TCS.
A major part of the deal means Sharp will be able to use its parent company, Foxconn's, manufacturing plants, helping it produce PCs more cheaply than if it did so alone.
"Foxconn is a PC contract manufacturer and has a great deal of expertise and production capacity," said Hiromi Yamaguchi, senior analyst at Euromonitor International told Reuters. "This acquisition will prove a further catalyst for more Sharp and Foxconn synergies."
