'Electronics tycoon' Hitachi sells itself

Hitachi sells home appliance business in Japan. Photo: Bloomberg .

Hitachi Group is considering the possibility of divesting its domestic home appliance business, as the company continues to restructure to focus on social infrastructure and digital solutions.

According to Nikkei , Hitachi has approached a number of companies to explore the possibility of acquiring this business segment. Samsung Electronics is said to be one of the parties that has shown the most interest. If negotiations are successful, the deal could be worth at least 100 billion yen (about 680 million USD ).

The home appliances division, operated by Hitachi Global Life Solutions, focuses on the domestic Japanese market, selling products such as refrigerators and washing machines. In the fiscal year ended in March, the division recorded revenue of 367.6 billion yen ( $2.49 billion ), down 2 percent from the same period a year earlier. However, earnings before interest, taxes, depreciation and amortization rose 13 percent to 39.2 billion yen ( $270 million ).

Hitachi is currently focusing on areas such as railways, power grids, industrial equipment and IT solutions. The group is also accelerating its strategic pivot to a business model centered around the Lumada platform, an IoT ecosystem that provides a comprehensive solution from development to operation and maintenance.

Meanwhile, the home appliance business, which relies heavily on one-time retail sales, is seen as not fitting into Hitachi's long-term digital revenue growth direction.

However, the company still leaves open the possibility of maintaining this business domestically. According to experts, home appliances still play an important role in maintaining Hitachi's brand presence among Japanese consumers.

Hitachi is focusing on social infrastructure and digital solutions. Photo: Bloomberg .

Japan’s consumer electronics market is showing signs of saturation. Total sales in fiscal 2024 are expected to rise 2.4% to 2.58 trillion yen ( $17.46 billion ), driven largely by increased demand during the pandemic and a trend toward value-added consumption, according to the Japan Electronics Manufacturers Association. However, growth is expected to slow due to the impact of an aging population.

The home appliance industry used to be one of the core strengths of Japanese electronics corporations. However, since the 2010s, many Asian companies have risen to take a large share of the global market. In 2012, China's Haier acquired Sanyo Electric's home appliance division. In 2016, Midea acquired Toshiba's home appliance division, while Foxconn took over Sharp. Now, only Panasonic and Mitsubishi Electric are the two Japanese corporations that maintain a significant presence in this field.

Hitachi is restructuring its portfolio aggressively. In 2020, it acquired ABB's power grid business (Switzerland), followed by GlobalLogic (USA) in 2021. At the same time, Hitachi is divesting from many areas that are no longer strategically relevant, including selling a majority stake in its international home appliance business to Arcelik in a joint venture.

“There is no end to the restructuring process. We will continue to reform to achieve sustainable growth,” said Toshiaki Tokunaga, CEO of Hitachi.

Source: https://znews.vn/hitachi-ban-mang-kinh-doanh-quan-trong-post1574700.html