Sony Reportedly Close to $165 Million Deal for Toshiba Image Sensor Unit

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Sony Corp. is in talks to buy Toshiba Corp.’s image sensor unit for about 20 billion yen ($165 million) as it seeks to build on its dominant position for the component used to capture smartphone pictures, said people familiar with the matter.

The Tokyo-based companies are close to a deal that may be announced as early as this week, said one of the people, who asked not to be identified because the discussions are private. Toshiba is seeking to raise cash after an accounting scandal that cut about $1.3 billion off profit reported over almost seven years.

Sony President Kazuo Hirai is investing in sensors as he counts on producing key components to drive earnings along with the higher-profile businesses of making consumer electronics, video games and movies. The company leads the global market for chips that smartphones and cameras use to digitize photos and is quadrupling spending on semiconductors to 290 billion yen to keep up with demand from customers including Apple Inc. and Samsung Electronics Co.

Sony controlled about 40 percent of the $8.7 billion market for CMOS image sensors last year, compared with about 16 percent for its next biggest competitor, Techno Systems Research estimates. The market is forecast to climb to about $12 billion by 2019, and the company expects its sales to increase as much as 62 percent to 1.5 trillion yen in three years.

Hirai is taking the sensors into automotive and other applications to develop new markets, seeking to produce affordable technology that can process 1,000 images a second.

Toshiba spokesman Tatsuro Oishi said Oct. 24 that nothing has been decided. Sony spokesman George Boyd declined to comment.

Toshiba, which makes everything from nuclear power plants to laptop computers and memory chips, has been selling assets to raise cash after the accounting scandal. In September, the company sold its stake in medical equipment maker Topcon Corp. in a 49 billion yen deal for a gain of about 30 billion yen.

Also in September, Toshiba agreed to sell a 30 percent stake in a building it owns for 37 billion yen and prior to that, sold its investment in Finnish elevator and escalator maker Kone Oyj, for a gain of about 113 billion yen.

Masashi Muromachi, the company’s president, in September pledged to prune underperforming businesses, including workforce reductions in appliances, personal computers, televisions and semiconductors.

Toshiba had some 198,700 employees as of March 31, the lowest since at least 2009, according to data compiled by Bloomberg.

The Nikkei reported the talks between Toshiba and Sony earlier on Saturday, without saying where it got the information.

SOURCE: Grace Huang and Takashi Amano 
Bloomberg