Toshiba is getting out of the personal computer business, selling its PC subsidiary to Sharp, which is these days owned by the Taiwanese manufacturing giant Foxconn (FXCNY).
Sharp will only pay $36 million for an 80.1% stake in Toshiba Client Solutions. Bear in mind that Toshiba made the first mass-market laptop back in 1985, and was a major presence in computer stores up until about 2010. It all went downhill from there, with only 1.4 million Toshiba computers shifting last year. Of course, that’s in the context of a broad shift from PCs to mobile computing devices.
Sharp got out of the PC business some eight years ago, but Foxconn is a major contractor in the industry and it should be able to make Toshiba PCs at relatively low cost, compared to Toshiba’s in-house efforts. Toshiba’s Dynabook laptop brand will be maintained.
Sharp, which Foxconn took over a couple years back for $3.8 billion, also said Tuesday that it was issuing $1.8 billion in new shares. This is in order to buy back preferred stock held by banks that previously bailed out Sharp.
Although the issuance will dilute Sharp’s stock by over 10%, the dilution would have been worse if the preferred stock had been converted into regular shares.
Toshiba (TOSBF), now a shadow of its former self, has been desperately trying to make up the losses caused by the bankruptcy of its U.S. Nuclear subsidiary, Westinghouse.
It sold Westinghouse to a Baupost Group entity at the start of this year, and finally completed the $18 billion sale of its microprocessor business to Bain Capital last week. The conglomerate’s TV business has gone to Hisense and its white-goods business to Midea Group.