Hisense Electric Co., Ltd, a publicly listed subsidiary of Hisense Group, announced the purchase of Toshiba TV production, brand, R&D & operation service on November 14, 2017.
With its 142-year history, Toshiba has a leading display technology in Japan. Hisense will purchase 95% stock shares of Toshiba Visual Solutions Corporation ("TVS"), a wholly-owned subsidiary of Toshiba Corporation, for 12.9 billion Japanese Yen (about $145 million) with Toshiba retaining 5% stock holding.
Hisense will obtain the TVS businesses including production, research and development, and sales functions as well as license to use the Toshiba brand for a period of 40 years for visual solution partners operating in Europe, South East Asia and other markets.
TVS primarily operates in TV and a variety of ancillary products, including commercial and advertisement display products. The TVS purchase also secures two factories in Japan and hundreds of Toshiba R&D employees, as well as a significant IP portfolio relating to TV technology business patents for image quality and acoustics.
Liu Hongxin, CEO of Hisense Group, says Hisense will optimize TVS's resources on R&D, supply chain or global sales channels, cooperate with and support each other in display technology, provide competitive content operation services for smart TVs for the global market, and accomplish fast growth in the Japanese market.
According to the IHS, sales of Toshiba TV ranked number-three in the Japanese market in 2016, with Hisense TV market share in Japan the highest among all non-Japanese brands. Both brands' cumulative market share reaches over 20% after the transaction. Hisense's TV business in 2016 ranked third in the world (IHS) and has held number-one market share in China for 13 consecutive years, says the firm.
As the Official Television Sponsor of the FIFA World Cup Russia 2018, Hisense is poised to continue to expand and implement its global brand vision and strategy. With the benefit of this acquisition, Hisense will develop and enlarge its international strategy of TV business in R&D, branding and marketing by operating under multiple brands.
Hisense was embroiled in a very public battle with Sharp earlier this year, after the latter company, which licensed its name to Hisense in a five-year deal two years ago, said it wanted its name back. Sharp accused Hisense of manufacturing sub-par products using the trusted Sharp name. Sharp filed a lawsuit alleging that the Hisense TVs using the Sharp name did not meet emission guidelines, nor rules on picture sizes and standards for device safety. Hisense denied all of the claims. Later in the summer, a gag order was issued preventing Sharp from discussing the arbitration, to which Sharp sued calling that decisiona First Amendment violation. The case continues.