Toshiba, Fujitsu, and Vaio to Potentially Merge PC Divisions

In an effort to increase economies of scale, Toshiba, Fujitsu, and Vaio are looking to combine PC divisions. Each of these divisions have experienced decreased profitability in recent years, and each company hopes this merger will return them to success. Toshiba is just coming off of an accounting scandal, Fujitsu has seen it production costs skyrocket due to the decreased value of the yen, and Vaio intends to increase its market share. However, the merger is still in its beginning stages and could potential fall through if it only produces minimal benefits.

The combined resources of Toshiba, Fujitsu, and Vaio would create a Japanese conglomerate that would capture roughly 30% of the Japanese PC market, which would unseat NEC Lenovo Japan as the market leader. However, the combined output of these three companies only accounts for 6% of global PC output.

Each company admits that it will be nearly impossible to return to previous levels of profitability, but each hopes that the merger will bring them back to profitability via economies of scale. In fact, this deal even has the potential to disrupt the market share of smaller Japanese PC companies such as AsusTek Computer and Acer. After the merger, the Vaio brand name would survive while the Toshiba and Fujitsu brand names would be dissolved (at least in the PC world).

Although a triple merger may seem like an odd move to outsiders, it is actually quite common place in Japan. For example, 2012 saw a state-sponsored merger between the ailing screen display divisions of Sony, Hitachi LTD, and Toshiba to create a single company called Japan Display Inc. If all goes well, this new PC conglomerate can have similar success. Look for the new Vaio company to make its debut by mid-2016.

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1. david smith
2. Posted on December 9, 2015
computer parts

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