Mar 19, 2016
Chinese companies are mopping up Japanese home appliance makers.
According to Nihon Keizai Shimbun Tuesday, Midea, a Chinese consumer electronics company, is finalizing a deal to take over Toshiba's white goods business.
Midea, the world's second-largest white goods maker with 4.6 percent market share, is especially competitive in washing machines and air conditioners. The Chinese company is reportedly trying to increase its market share further by acquiring this business from Toshiba, which is a popular brand in Japan and Southeast Asia.
Japan's public-private joint fund for industrial renovation initially considered merging Toshiba's white goods business with that of Sharp. However, China's Hung Hai Group has recently taken over Sharp, forcing the fund to sell out Toshiba's white goods business, too.
Toshiba, which has been restructuring since its accounting scandal last year, has sold its medical equipment section to Canon and its image sensor section to Sony. If it completes the sell-off of white goods business, the Japanese company will be able to focus on its nuclear power and semiconductor businesses, the paper said.
Midea's acquisition of Toshiba's white goods business is likely to strengthen Chinese makers influence on global home appliance and computer markets further, as Hung Hai plans to make massive investments in Sharp's domestic appliance division.
Another Chinese electronics giant, Haier, acquired Sanyo's white goods business in 2012, followed by its takeover of GE's home appliance division this year. In 2011, Chinese laptop maker Lenovo also took over NEC's computer business.
The Chinese companies are acquiring their money-losing Japanese competitors because they think the Japanese companies still have technology and brand power.
Toshiba's white goods division, for instance, posted a loss of more than 2 trillion won ($1.6 billion) last year but still enjoys considerable consumer loyalty in Japan and Southeast Asia.
China's "corporate shopping" in Japan will pose an enormous challenge to Korea's Samsung Electronics and LG Electronics, which have become global powerhouses by beating their Japanese rivals, industry sources here say.
Source: Korea Times