Midea acquire 80.1% stake in Toshiba home appliances business
Toshiba Corporation and China-based Midea Group Co., Ltd. have signed a Definitive Agreement where Midea will acquire an 80.1% stake in Toshiba Lifestyle Products & Services Corporation., the home appliances arm of Toshiba. The transaction price for the 80.1% stake is approximately JPY53.7 billion (US$473 million) (subject to certain adjustments) at closing.
The home Appliances products made by Toshiba includes refrigerators, washing machines, vacuum cleaners and other small domestic appliances. Midea is given the license to use the Toshiba brand worldwide in relation to the Business for 40 years. Additionally Midea will receive more than 5,000 intellectual property assets and a license to use other home appliance related intellectual properties retained by Toshiba.
“We are glad to witness the fruition of our strategic partnership with Midea, crystallized by this transaction,” said Masashi Muromachi, Representative Executive Officer, President and CEO of Toshiba. “The home appliances business has long been an important part of our company, culture and brand image. In the process of identifying a trusted partner, we carefully looked at track records, capabilities, resources and commitment to the Business. Midea and Toshiba have more than 20 years’ successful cooperation in various areas and have built a good mutual understanding. We are impressed by Midea’s focus on globalization, strong product development capabilities, extensive global distribution network and commitment to high quality. I am confident that Midea’s further investment in R&D, marketing and branding will bring about a brighter future for the home appliances business.”
Mr. Fang Hongbo, Chairman and President of Midea, commented: “We are pleased to elevate the partnership between Toshiba and Midea to a new level, which I am sure will foster many more exciting cooperation opportunities ahead. Today is also an important landmark in Midea’s globalization endeavor. With a strong global home appliance and HVAC business, the addition of Toshiba Home Appliance, its iconic brand, talented team and leading technologies, will significantly strengthen our competitiveness in Japan, Southeast Asia and the global market. We appreciate the trust that Toshiba has placed in us by signing up to a long term brand licensing arrangement. Midea will continue our adherence to the highest standard of brand image, product quality, and customer service, which has been the bedrock of our achievements to date. We also recognize that the Business’s current management and employees are very valuable assets, and I am confident that our additional investment will offer many promising opportunities for this talented team. I look forward to working closely with Toshiba to further grow the Business and develop Midea into a global home appliance power house with a focus on innovation.”