Sony Corp. (NYSE:SNE) has announced the sale of a portion of its battery business to Murata Manufacturing Co Ltd. It has signed a non-binding memorandum of understanding of its intent to negotiate the transfer of its battery business to Murata. Both Sony and Murata are aiming to sign executive binding agreements by mid-October 2016 and the companies aim to complete the deal by March 2017.
In a joint statement, the companies announced that the sale will include the battery business of the Sony Energy Devices Corp subsidiary, which makes lithium-ion polymer batteries for smartphones, tablets and digital cameras, and lithium-ion rechargeable batteries. The sale will include Sony’s battery manufacturing operations in China and Singapore, the assets and personnel attached to sales and R&D sites in Japan and across the globe. Sony will keep retail branded battery operations related to USB and alkaline batteries and other products.
Murata manufactures capacitors, sensors and other electronic parts for smartphones, white goods, industrial equipment and healthcare products. Murata said acquiring Sony’s battery operations would help the company expand in automotive, healthcare and energy markets. Murata also wants to expand its share of the communications market.
This sale fits in with Sony CEO Kaz Hirai’s initiative of purging Sony of divisions that are not performing well. The company took a 30.6 billion yen (271 million US dollars) impairment charge on the division at the end of the last fiscal year. The exact terms of the deal have yet to be determined and are subject to due diligence being completed. Sony said it may book losses from the sale.
Sony is making the move in response to the slowing demand for smartphones. Now, the company is turning its focus to its games business for growth. The company will soon launch its virtual reality headset. Sony is also planning to re-enter the robotics industry after a decade.