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Reports that three of Japan's biggest PC makers - Sony spin-off company Vaio, Toshiba, and Fujitsu - are planning to merge their computing divisions have been circulating for a while, but it now looks as if the deal is closer than ever.
Bloomberg reports that Hidemi Moue, the CEO of Vaio parent company Japan Industrial Partners Inc., said that the three firms are expected to come to an agreement to combine their computing arms by the end of March.
Moue added that Vaio is expected to have the biggest stake in the merged company, meaning that the new firm is likely to bear the Vaio name. It would control more than 30 percent of Japan's market, pushing out Lenovo from the number one position.
The news comes just as Toshiba denied Japanese reports that it was about to exit the PC market. The company is still suffering the fallout from the accounting scandal last summer when it admitted to inflating profits by £1.9 billion over a seven-year period. CEO Hisao Tanaka and Vice President Norio Sasaki eventually resigned over the matter, and the company has cut 7800 jobs as a result of the revelations.
At the time of the job cuts, Toshiba did say that it would "consider alliances with third party companies."
The newly formed company will allow the three firms to share their resources, allowing them to save money on manufacturing and production costs. "The PC market is shrinking, which means there are merits in working together to make the most of research, production volumes and marketing channels," said Moue. "We can do it with minimal cannibalization."
All three companies have felt the impact of slowing PC shipments, and will likely see the merger as a way to better compete in a challenging market. But Damian Thong, an analyst at Macquarie Group Ltd. in Tokyo, believes that merging the three companies will have little impact outside of Japan.
The deal still isn't set in stone, but the news caused Toshiba's shares to rise 8.2 percent, its biggest jump in almost five years. Fujitsu's also increased by 2.5 percent. Vaio is not listed.