Toshiba Looks to Spin Off PC Business

TOKYO—Toshiba Corp. is looking to spin off its personal-computer business and merge it with the PC business of others in the electronics industry, two people familiar with the situation said Friday.

The proposed spinoff would represent the latest effort by Toshiba to strip out unprofitable units after an accounting scandal earlier this year forced top management to resign and led to large write-downs.

The Japanese electronics conglomerate admitted it had been inappropriately inflating reported profits at several business units for years. Toshiba already has said it plans to sell part of its semiconductor unit to Sony Corp.

The people familiar with the situation said Toshiba is in contact with several other companies that make PCs, including Fujitsu Ltd. of Japan and several non-Japanese manufacturers.

Fujitsu said in October it planned to spin off its PC business. On Friday, it said it was considering various options, but hasn't made any decisions.

The Nikkei business daily first reported the talks over a possible combination between Toshiba's PC unit and the PC units of other companies. Nikkei said Vaio Corp., the former PC unit of Sony. that is now controlled by an investment fund, might join the combination. A Vaio spokeswoman denied that Vaio was in such discussions and called the report "complete speculation."

Toshiba's personal-computer business has a long history. The company says it made the world's first commercially available laptop computer in 1985. But the unit hasn't been profitable recently and it has fallen far behind industry leaders.

According to research firm Euromonitor, Toshiba has a 2.3% share in the global laptop computer market, while Apple Inc. has 21.1% and Samsung Electronics Co. has 13.2%. Toshiba has already stopped making desktop computers.

Japanese electronics companies have largely exited the PC market, once a big moneymaker for them. Hitachi Ltd. and Sharp Corp. quit the business, while NEC Corp. has a minority stake in its joint company with Lenovo Group., Panasonic Corp., meanwhile, has been focusing on enterprise customers with its laptop offerings.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com

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(END) Dow Jones Newswires

December 03, 2015 22:45 ET (03:45 GMT)

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