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E-mail China Daily, July 1, 2016
Midea closes deal to buy Toshiba stake
China's home appliances maker Midea Group said that it has closed a deal on Thurs-day to buy a majority stake in the white goods businesses of Toshiba Corp.
The Guangdong-based company will spend 51.4 billion yen ($500 million) for 80.1 percent of Toshiba Lifestyle Products & Services subsidiary, it said in a statement. After the transaction, Midea will be able to use the brand name of Toshiba for 40 years.
Midea Chairman Fang Hongbo said it was a strategic partnership and the deal will benefit clients, suppliers as well as employees.
"I hope to use the resources and strength from each other to find potential business opportunities," Fang said.
Analysts said the sale of the subsidiary, which produces consumer electronics appliances such as washing machines and refrigerators, is expected to give Midea easier access to Toshiba's global sales network.
The Japanese company has nine production plants in Japan, China and Thailand and 34 sales bases and 95 service offices.
"The money is well spent and the deal worth even more than that (price)," said Liu Buchen, a senior analyst in home appliances and a former spokesman for TCL Corp.
Toshiba's white goods sales are among the biggest in Japan's market and it has kept a high growth in many parts of Southeast Asia, and the 40-year brand name usage was also valuable, he said.
Shiro Saito, senior vice-president of Toshiba, told China Daily during the Tianjin Summer Davos meeting that he was impressed about the management of the Chinese company.
"From what I know, Midea's management is better than I previously thought. They are a good company in terms of quality and innovation," he said.
The deal, if completed, marks yet another Chinese acquisition in the foreign consumer electronics sector. In January, Haier Group agreed to buy General Electric's home appliances business for $5.4 billion in cash.
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