Talks to integrate the personal computer units of Toshiba Corp., Fujitsu Ltd., and Vaio Corp. are on the verge of breaking down, sources close to the matter said Friday. Negotiations have foundered on a range of disagreements, including the need for restructuring.
The three companies have been unsuccessful in drawing up a business strategy for the proposed merger, and they are at odds over which production facility to scrap, the sources said.
The companies are still talking, but no agreement is in sight, the sources said.
The integration would enable the three companies to gain dominance in the country's struggling PC market. Consumers have increasingly been turning to smartphones and tablets, prompting PC makers to explore new ways for growth.
Engulfed in an accounting scandal that led to a broad restructuring of its unprofitable businesses, Toshiba is seen as willing to separate its PC business, while Fujitsu has already spun off its own PC unit.
Japan Industrial Partners Inc., the largest shareholder of Vaio, a Sony Corp. spinoff, initially envisaged taking a majority stake in a new company to be created following the merger of the PC units.
If the merger talks fall through, Toshiba and Fujitsu could look for another investor and seek an agreement without Vaio to integrate their PC units, or they could separately look for foreign companies to sell their units to, the sources said.