Sony and Japan Industrial Partners Sign Memorandum of Understanding for Sale of PC Business
TOKYO, February 6, 2014—Sony Corporation ("Sony") and Japan Industrial Partners ("JIP") today announced that they have entered into a memorandum of understanding that confirms their intent for Sony to sell to JIP Sony's PC business currently operated under the VAIO brand (the "Sale"). Sony and JIP are aiming to conclude definitive agreements by the end of March 2014, following due diligence and negotiation of detailed terms and conditions of the Sale.
The parties' current intention is to sell Sony's PC business and certain related assets to a new company established by JIP, targeting July 1, 2014 for the completion of the Sale. While the terms and conditions of the Sale and details of the new company's structure are subject to further discussion between the two parties, the following is the current basic understanding:
- The new company will conduct operations for its VAIO-branded PC business as an independent business entity, including planning, design, development, manufacturing and sales.
- Following reevaluation of the product lineup, the new company will initially concentrate on sales of consumer and corporate PCs in the Japanese market and seek to optimize its sales channels and scale of operations, while evaluating possible further geographic expansion. Through these measures, the new company will aim to quickly secure stable profit.
- The new company will be based at the Nagano Technology Site (Azumino City, Nagano Prefecture), the hub of Sony's current PC operations. At the start of operations, the new company is expected to hire approximately 250 to 300 Sony employees currently engaged in PC-related operations, such as planning, design, development, manufacturing and sales at Sony and Sony Group companies in Japan.
- The new company will be established and operated with capital investment from and management support of JIP. Sony will initially invest 5% of the new company's capital to support its launch and facilitate a smooth business transition.
- The parties will continue to discuss the consideration for the contemplated Sale, which will depend on the full scope of assets to be sold as finally determined in the definitive agreement.
Following a comprehensive analysis of factors, including the drastic changes in the global PC industry, Sony's overall business portfolio and strategy, the need for continued support of Sony's valued VAIO customers, and future employment opportunities for personnel involved in the VAIO business, Sony has determined that the optimal solution is to concentrate its mobile product lineup on smartphones and tablets and to transfer its PC business to a new company established by JIP that will enable the continuation of the VAIO branded PC business. As a part of the sale to JIP, Sony will cease planning, design and development of PC products. Sony's manufacturing and sales will be discontinued after the Spring 2014 lineup. Even after Sony's withdrawal from the PC market, Sony customers will continue to receive aftercare customer services.
JIP has extensive experience with "strategic carve-outs," whereby it supports companies in the process of relinquishing businesses or subsidiaries as part of a process of focus and selection, provides necessary investment to the relinquished business or subsidiary and helps realize the business's growth potential as an independently operated entity. JIP believes that with its support, the new company that will operate the VAIO-branded PC business will be able to achieve future growth and profitability and meet the expectations of VAIO customers by leveraging the wealth of innovative design expertise and operational knowhow accumulated by Sony within the PC business.
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