Sanyo Sells Phone Business to Kyocera

Sanyo is selling its mobile phone business to Kyocera for $375 million, with Kyocera inheriting Sanyo's North American operations and 2,000 employees.

Sanyo has agreed to sell its mobile phone business to rival Kyocera. The deal places the value of Sanyo’s phone business at ¥50 billion, but after figuring in debts and assets, the total transaction will net Sanyo about ¥40 billion, or around $375 million. Under the terms of the deal, Kyocera will roll its mobile operations into Sanyo’s North American mobile phone business, and also pick up some 2,000 Sanyo employees. The deal is scheduled to close April 1.

“Kyocera has said that in addition to highly valuing Sanyo’s excellent human resources, they also highly value Sanyo’s North America client base and Sanyo’s technological development capability,” said Sanyo executive VP Kentaro Yamagishi, in a statement. “As for the merging of these two businesses, I firmly believe that it will offer a wider spread of both facilities and opportunities to employees.”

At this point, Sanyo and Kyocera are both minor players in the global mobile phone market, but Kyocera is hoping to boost its presence outside of its native Japan by aligning more strongly with U.S. mobile operators like Sprint and Verizon, which have historically been Sanyo’s largest North American customers. Kyocera says it will continue to use the Sanyo brand name as well as its own on handsets it offers in both Japan and North America, but will reduce costs by combining the two mobile phone businesses.

There’s little doubt that a combined Sanyo/Kyocera will face challenges going up against makers like Nokia, Motorola, Sony-Ericsson, LG, and Samsung, and BenQ’s disastrous acquisition of Siemens mobile phone operations proves that buyouts aren’t the best way to build business in the industry. Still, Kyocera plainly hopes that expanding its market base outside Japan will reap benefits; time will tell.