Sony Corp. negotiates with Japan Industrial Partners Inc. to sell its PC business in Japan

Sony Corp. is currently negotiating with the buyout firm Japan Industrial Partners Inc. about selling its Japanese personal-computer business, a person familiar with the matter said.

The person with knowledge of the situation, who asked not to be named before an official public announcement is made, revealed that a memorandum of agreement for a sale, which will include the Vaio brand, may be released as early as tomorrow. Sony is also likely to announce a wider reorganization, including lay-offs, because the company is still in a process of considering what to do with its PC operations in the rest of the world.

Most analysts say that the efforts of Kazuo Hirai, who is the Chief Executive Officer of Sony Corp., to cut PCs would be helpful for the improvement of the consumer-electronics groups results, because the company struggles with the decreasing demand for key products and the increasing customers interest for tablet computers.

Sony Corp. is expected to report its third-quarter results on February the 6th. The company announced second-quarter losses at its PCs, cameras and televisions unit.

Junya Ayada, one of the analysts working for Daiwa Securities Group Inc., said for Bloomberg: “Selling the PC operation is positive for Sony in the long term. The PC is being robbed of the consumer market by tablet computers.”

On October the 31st 2013, Sony revealed that its PCs unit sales experienced a “significant decrease” in the fiscal second quarter. Its smartphone sales increased 68%, which considerably helped the PCs, phones and tablets unit of the company narrow its loss from 23.1 billion yen for the same period in 2012 to 900 million yen. The revenue of the PCs unit rose by 1.5%.

Sonys spokeswoman Mami Imada said in a telephone interview today that the company is considering different measures that could be taken for its PC business. The person familiar with the process reported that the sale plan of the company includes only the Vaio operations located in Japan. The company is said to have a strong presence on the Japanese market, which is the reason why it becomes more focused on selling to business customers. The person also revealed that Sony may close its overseas PC businesses or sell more of its assets to Japan Industrial.

Bob ODonnell, chief analyst of the consulting firm Technalysis Research, said for Bloomberg: “People are recognizing the consumer PC market is in tough straits. Sony’s challenge with Vaio has been trying to pull together a story that sells.”

Sony Corp. rose by 4.58% in Tokyo on Wednesday, settling the session at JPY1 600. On the New York Stock Exchange, shares rose by 5.57% on February 4th to $16.10. The 17 analysts offering 12-month price forecasts for CNNMoney have a median target of $17.74, with a high estimate of $31.36 and a low estimate of $13.61. The median estimate represents a +10.16% increase from the last close.