Japanese electronics giant Toshiba said Tuesday it would pay about $850.0 million for IBM’s retail products unit, with the US firm saying it would create the world’s leading point-of-sale company.
The transaction was expected to be completed later in the year, with the move aimed at retailers who “will benefit from accelerated development of new products and solutions”, the Japanese firm said in a statement.
The deal comes as Japanese firms take advantage of a high yen to explore overseas expansion, with the stronger currency making their investment in foreign firms relatively cheaper.
The purchase will help Toshiba expand its point-of-sale (POS) systems business, from scanners and self-service kiosks for tallying up customer purchases to software that helps manage inventory.
Norio Sasaki, Toshiba’s chief executive, said it would help the firm expand in North America, Europe “and the emerging economies.”
“I also expect this significant step to support innovation and the creation of new business opportunities for Toshiba Group,” Sasaki said.
IBM’s Retail Store Solutions business, which last year posted sales of $1.15 billion with about 1,000 workers worldwide, is to become a wholly owned subsidiary of Toshiba Tec, a division of the Japanese firm.
Toshiba and other Japanese exporters has suffered plunging profits as the strong yen, which helps fund foreign expansion, also makes their own products more expensive overseas amid weak global demand for digital products.
Japanese firms were also pounded by last year’s quake-tsunami disaster, and subsequent flooding in Thailand, which disrupted operations for firms with plants in the Southeast Asian nation.
In January, Toshiba more than halved its net profit forecast for the year to March to 65.0 billion yen from 140.0 billion yen, while it also cut its full-year sales forecast to 6.2 trillion yen from 7.0 trillion yen.
Last year, Toshiba said it would shut three semiconductor factories in Japan and slow production at a number of other plants as part of a reorganisation of its business, which also includes liquid crystal display televisions.
The decline has some Japanese firms aggressively chasing after foreign firms.
Last month, Japanese chemical giant Asahi Kasei announced a plan to buy US-based health care firm Zoll Medical for $2.21 billion in a friendly takeover.
Japanese drugs giant Dainippon Sumitomo Pharma also said it will buy US biotechnology cancer specialist Boston Biomedical for a price that could hit $2.6 billion.
Last year, Takeda Pharmaceutical reached a 9.6 billion euro ($12.6 billion) deal to buy Swiss drugmaker Nycomed in what would be one of the biggest overseas acquisitions by a Japanese firm.
However, some of Japan’s best-known corporate names including Sony, Sharp and Panasonic have announced management shakeups, layoffs, sales of various businesses and tie-ups with rivals after warning of massive losses.
Last month, Sharp announced a deal with Taiwan’s Hon Hai Precision as part of a liquid crystal display panel tie-up as it looks to save a balance sheet awash in red ink.