TOKYO (AP) — Sanyo Electric Co. said Monday it will sell its troubled mobile phone operations to Kyocera Corp.
The two electronics companies have said the value of the business to be transferred is about 40 billion yen ($374 million). Including debt the deal — set for completion April 1 — is worth about 50 billion yen ($467 million), although the companies have yet to agree on a final transaction price.
Sanyo started making mobile phones in 1994 and has supplied several key mobile phone carriers for both in and outside the country.
But the company faced ''intensified competition from rival companies,'' Sanyo said in a statement. ''In order to meet the best interest of the business and its stockholders, Sanyo has ... concluded that a transfer of the business to Kyocera would be the ideal solution.''
The long-anticipated sale of the mobile phone unit comes months after Goldman Sachs and other investors saved Sanyo in a 300 billion yen ($2.8 billion) bailout.
Sanyo's former president was ousted last year after he refused to make major reforms. Sanyo has already sold its small mobile phone retail business and dumped its remaining holdings in Sanyo Electric Credit Co.
Under Monday's agreement, about 2,000 employees in Sanyo's mobile phone operation will be transferred to Kyocera, which will continue to use the Sanyo brand on handsets at home and overseas.
Sanyo's widespread businesses include TVs and other home appliances, but the company has said it has set solar and battery operations as its core business. The company is aiming to book a group net profit this fiscal year through March for the first time in four years.
Kyocera has close ties with telecommunications company KDDI Corp.
Sanyo shares fell 5.04 percent Monday and Kyocera declined 3.6 percent amid a general sell-off in Asian markets. Tokyo's Nikkei 225 index dropped 3.9 percent and Hong Kong's Hang Seng lost 5.5 percent.
