VAIO, Fujitsu and Toshiba PC Division Merger Stalls

With the PC market being increasingly commoditized, those firms without economies of scale are seeing their PC divisions are more of a liability than an asset. After being spun off from Sony nearly 3 years ago, VAIO entered talks with Fujitsu and Toshiba to merge their PC divisions together. Combined, the 3 would have challenged current Japanese market leader NEC Lenovo. Unfortunately, it appears that the talks have broken down for now.

The main breakdown in the negotiations was due to disagreements on how to merge assets. Japan Industrial Partners, the majority owner of VAIO, wanted to cut as much fat as possible during the merger. Fujitec on the other hand, wanted to keep as many of their current assets as possible and wanted to minimize restructuring. Toshiba seemed to be in no rush to close a deal even as their finances plunged even more into the red.

As the situation continues to deteriorate for the 3 firms, they may soon be back at the table to hammer out a deal. Combined, they would have over 30% of the domestic and just over 3% of the global market. That just might be enough to save them from disappearing. On their own though, they are unlikely to stand a chance of lasting any sustained period of time.