EXCLUSIVE: Hisense Take On Toshiba TV Debt Current Suppliers Set To Stop Development Work
Chinese TV brand Hisense has not only acquired the Toshiba brand for US$114 million they are also set to take over the debts of the Toshiba Visual Products Division along with 300 staff and the rights to over 100 patents that Toshiba have for display related products.
Source at Hisense have told ChannelNews that as part of the deal the Company has been given access to the brand for 40 years.
The Chinese Company is also taking over the current debts of Toshiba Visual Products which is believed to be approximately US$125 million for the current financial year.
Currently the brand is split up among three manufacturers Compal Electronics who have the rights for the USA market.
The Taiwanese Company is currently selling 1M Toshiba branded TV’s a year into the US market.
In Europe the rights to the Japanese brand is currently owned by Vestel while Skyworks have the rights to the brand in Australia, Asia, India and South America.
ChannelNews understands that Hisense intends to terminate these contracts as soon as their current contracts with Toshiba run out.
At this stage it’s not known whether the 300 personnel including leading display engineers currently employed at TVP will be retained in Japan.
According to sources three Companies were in the bidding for the Toshiba Visual Products business, Skyworks, Compal and Hisense.
Hisense won the contract because they were prepared to take on the current debt at the cash strapped Company who is the manufacturer of a TV board that most Japanese TV manufacturers use in their TV’s.
A Hisense source said “At this stage we are currently talking to the other manufacturers of Toshiba TV’s. The issue is whether these Companies some who have 2 to 3 years left on their contracts with Toshiba will continue developing Toshiba branded TV’s”.
Yesterday Hisense announced that will obtain the TVS businesses including production, research and development, and sales functions as well as licence to use the Toshiba brand for a period of 40 years on visual display products.
Earlier this year the Sharp Corporation filed a legal action against Hisense, alleging that the Chinese TV and appliance maker who is struggling to sell their own branded products in Europe and the USA had denigrated its brand value by selling substandard Sharp TVs and advertising false features of Sharp’s products.
Australia where the Chinese brand is competing in the bottom end of the TV market by buying market share the Company has been more successful than in Europe and the USA where their brand is struggling.
Liu Hongxin, the CEO of Hisense Group, said that Hisense will incorporate TVS’s resources on R&D, supply chain and global sales channels, to provide “competitive content operation services for smart TVs for the global market and accomplishing continued and fast growth in the Japanese market”.
Toshiba is set to retain a 5% stake in the subsidiary.
“It has become hard for Toshiba itself to further invest its management resources and execute measures to strengthen the competitiveness” of the TV business, the Company said.