Toshiba Corp., Fujitsu Ltd and Vaio Corp., which was recently spun off from Sony Corp., have entered into the final round of negotiations in regard to integrating their PC divisions.
If the three firms can reach an agreement, they plan on establishing a joint holding company with subsidiaries responsible for running each firm's PC businesses.
One of the main motivations for this joint venture is that will allow all three firms to keep their respective brands. Toshiba, Fujisu and Vaio are all well-known brands that have strong name recognition in the Japanese market.
Toshiba, Fujitsu and Vaio will be working together to improve their production systems. The three firms will also use their combined power to increase price pressure on their component suppliers. Toshiba, Fujitsu and Vaio will dethrone NEC Lenovo Japan Group when it comes to shipments in the Japanese PC market if they are successful in reaching an agreement.
The parent company of Vaio, the investment fund Japan Industrial Partners Inc., will have a higher equity stake and will be taking more initiative in the new company. Toshiba and Fujitsu are both planning to have equity stakes that are lower than 50 per cent in the new company. This will keep their PC businesses separate from their other businesses and will help mitigate some of the risk of continuing to manufacture PCs despite both companies seeing decreased sales in their PC divisions.
Toshiba, Fujitsu, and Vaio are aiming to reach a final agreement by 31 March which will be the end of the 2015 fiscal year.