Toshiba Corp. is close to agreeing on the sale of its white goods business to Chinese home appliance manufacturer Midea Group, sources said Tuesday.
Toshiba is likely to sell a majority stake in its Toshiba Lifestyle Products & Services subsidiary for tens of billions of yen, according to the sources.
Midea hopes to expand its business by tapping into Toshiba’s sales networks in Japan and Southeast Asia, they said.
Midea had sales of some ¥2.6 trillion in 2014.
The sale of the subsidiary, which produces consumer electronics appliances such as washing machines and refrigerators, is likely to be incorporated into the Japanese industrial conglomerate’s medium-term management plan due out within the week.
Struck by a sweeping accounting scandal, Toshiba is scrambling to turn around its fortunes. Toshiba Lifestyle recorded an operating loss of ¥35.6 billion for the April to December period.
Toshiba’s home electronics operations are expected to incur the fifth straight year of losses in the year ending this month.
Toshiba is also negotiating with Turkish maker Arcelik A.S. over the white goods unit, but Midea appears to have made a more favorable offer, the sources said.
Toshiba initially considered integrating its white goods business with Sharp Corp., but leaned toward a deal overseas after Sharp agreed to a takeover by Taiwan’s Hon Hai Precision Industry Co., the sources added.
The deal, if completed, marks yet another foreign acquisition of assets in the Japanese consumer electronics industry.
Another example of foreign acquisitions of white goods operations in Japan is the sale by Sanyo Electric Co., a subsidiary of Panasonic Corp., of refrigerator and washing machines businesses to China’s Haier Group.
The talks with Midea come as Toshiba is promoting structural reforms for its unprofitable businesses following its accounting scandal. Toshiba has already decided to shed 6,800 jobs in its home electronics operations.
Toshiba is expected to reach an agreement later this week to sell its medical equipment unit to Canon Inc., which will further help to patch up the balance sheet. Toshiba is bracing for an estimated group net loss of ¥710 billion for fiscal 2015.
Toshiba is also trying to integrate its personal computer business with Fujitsu Ltd. and Vaio Corp., a spinoff of Sony Corp.