Japanese conglomerate Hitachi is considering selling its domestic home appliance subsidiary as part of the group’s effort to focus on its social infrastructure and digital segment, with South Korea’s tech giant Samsung Electronics Co. interested in the company, the Nikkei newspaper reported on Tuesday.
Hitachi has approached multiple companies to see if they would purchase the white goods business and
Samsung was believed to be among the potential suitors, the Japanese daily said.
Officials from Hitachi and Samsung were not available for comment.
The deal could be worth around 100 billion yen ($679.7 million) or more, according to the report.
The group is mulling unloading Hitachi Global Life Solutions Inc., which produces white goods such as refrigerators and washing machines for the Japanese market.
TO FOCUS ON LUMADAHitachi's main business operations lie in railway systems, power grids, information technology (IT) solutions and industrial equipment, the Nikkei said. The group is also shifting to a business model centered on its Lumada Internet of Things (IoT) platform, according to the newspaper.
Lumada generates long-term and continuous revenue from streams ranging from solution development to maintenance.
“The white goods business, on the other hand, is centered on one-off sales and presents a challenge in generating digital revenue from users following sales,” the Nikkei said.
Home electronics were once Hitachi's main strength, but the company has since downsized the segment after struggling with flat-screen televisions and other products, according to the daily.
In 2021, Hitachi sold a majority stake of its international white goods business, excluding Japan, to Turkey's Arcelik, with the operation run as a joint venture.
HEYDAY IS OVERHitachi Global Life Solutions’ sales dipped 2% to 367.6 billion yen in the fiscal year of 2024 ended March from the previous year, although earnings before interest, taxes and amortization climbed 13% to 39.2 billion yen.
Hitachi is keeping open the option of retaining the white goods business, however, the Nikkei said. Household appliances, including items like refrigerators and washing machines, have the potential to contribute to brand recognition among consumers.
Japanese electronics manufacturers had dominated the home appliance market.
The home appliance sector was once an area of strength for Japanese electronics manufacturers. But since the 2010s, competitors in other Asian countries have taken over as the dominant players.
In 2012, China's Haier Group acquired the white goods business of Japan's now-defunct Sanyo Electric. China's Midea Group bought a struggling Toshiba's white goods business in 2016 and Taiwan's Foxconn acquired Sharp in the same year.
Write to Jongwoo Cheon at
jwcheon@hankyung.com Jennifer Nicholson-Breen edited this article.
