In this transaction, Hisense will purchase 95% stock shares of Toshiba Visual Solutions Corporation (TVS), a wholly owned subsidiary of Toshiba Corporation, for 12,9 billion Japanese yen (about R1,6 billion).

Toshiba will still hold its 5% stock price, while Hisense will obtain the TV businesses, including production, research and development (R&D), and sales functions.

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“Meanwhile, TVS will acquire a worldwide license to use the Toshiba brand in connection with its visual solutions products and services for a period of 40 years, including in connection with TVS’s existing business partners operating in Europe, South East Asia, and elsewhere,” the company said in a statement.

Hisense CEO Liu Hongxiu said the company will optimize TVS’s resources on R&D, supply chain or global sales channels, and cooperate with and support each other in display technology.

This is in order to provide competitive content operation services for smart TVs for the global market and to accomplish continuing and fast growth in the Japanese market.

Toshiba has been a leader in display technology in Japan, with the brand being top-ranked in the Global Technology Brand List, particularly in China.

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TVS will primarily operate as Toshiba TV and various ancillary products, including commercial display and, advertisement display products. TVS has two factories in Japan and hundreds of R&D employees and has a significant IP portfolio related to TV business, including patents related to TV image quality and acoustics.

The company says that with the benefit of this acquisition, Hisense will develop and enlarge its international strategy for its TV business in the areas of R&D and branding and marketing, by operating under multiple brands.