Sharp Corp. aims to bring the personal computer business it will buy from Toshiba Corp. into profitability in two years, President Tai Jeng-wu said Wednesday.
“We will turn it into the black in one to two years and recover our investments,” Tai told reporters in Osaka a day after Sharp announced it will purchase Toshiba’s loss-making PC unit for ¥4 billion ($36.4 million).
In the deal, Sharp will acquire an 80.1 percent stake in Toshiba Client Solutions Co., which once held the biggest share of the global laptop market but has since lost out to overseas rivals. The stock transfer is planned for Oct. 1.
Sharp also announced it will issue new shares worth up to ¥200 billion to buy back preferred shares from banks, seeking to quickly improve its financial status.
Sharp plans to keep using Toshiba’s well-known Dynabook PC brand name.
In his interview, Tai also said that he will stay on as chief executive until Sharp’s medium-term business plan, running through March 2020, is completed. He will double as the company’s chairman effective June 20.
In 2016, Tai was tapped by Sharp’s parent company Hon Hai Precision Industry Co. to take the lead job, and steered the electronics firm to its first group net profit in four years in the 2017 fiscal year.
Tai said he intends to rebuild the PC business in the domestic market by around March 2020 before expanding it overseas. Toshiba’s PC sales have slumped amid competition from Chinese and other international firms, as well as the spread of smartphones and tablet computers.
Tai has expressed a willingness to re-enter some electronics businesses from which Sharp had withdrawn. The company exited the computer business in 2010 as the company went down a money-losing spiral.
On top of Hon Hai’s manufacturing expertise, Sharp produces LCD panels, which can be used for computers. Thus, there is a good chance that Sharp can provide cost-competitive computers and turn the business into a source of profit, according to industry-watchers.
Hon Hai, which assembles Apple Inc.’s iPhones and is also known by its trade name Foxconn, bought Sharp in August 2016 in the first acquisition of a major Japanese electronics-maker by a foreign company.
Toshiba is letting go of its suffering computer business as part of a portfolio-restructuring effort after facing financial losses resulting from its former nuclear unit, U.S.-based Westinghouse Electric Co.
According to a document released by Toshiba, its computer business logged an ¥8.2 billion net loss in the 2017 fiscal year after seeing a ¥1.7 billion net loss the previous year.