Local reports said Sony, an electronics maker under Japan's Sony Group, will spin off its TV institutional sector and set up a TV joint venture with Chinese company TCL.
According to a report by Nihon Keizai Shimbun (Nikkei) on the 20th, Sony on this day signed a basic agreement with TCL for a strategic partnership in home entertainment.
In the joint venture that will take over Sony's home entertainment business including TVs, the equity will be 51% for TCL and 49% for Sony.
The two companies plan to hold additional talks to conclude a final contract by the end of March this year. They also plan to launch the new company's business in April next year, responsible for the development, manufacturing, and sales of TVs and home audio. The new company is expected to use Sony's existing TV brands, "Sony" and "Bravia."
Through a press release, Sony said, "The new company will develop its business by leveraging Sony's high-definition and high-quality sound technologies, brand power, and supply chain, while taking advantage of TCL's advanced display technologies, global-scale business base, price competitiveness, and vertically integrated supply chain."
The agreement is drawing attention as it comes amid tensions between the Chinese and Japanese governments. Judging by the equity structure, Sony's TV business appears subordinated to TCL. Nikkei reported, "Sony's TV and home audio businesses have been shrinking," and, "TCL's TVs rank second in the world with a 13.8% market share, behind Samsung Electronics at 16%, while Sony stands at 1.9% for 10th place," citing market research firm data.