Fujitsu in talks to sell mobile phone unit to Japanese investment fund

Japan’s Fujitsu Ltd said on Friday it was in talks about selling its mobile phone business to investment fund Polaris Capital Group, a deal that local media reported could fetch up to around 50 billion yen ($456 million).

An official agreement is expected by the end of the month, the Nikkei newspaper said, adding that Fujitsu would be selling a majority stake in the business.

Polaris will aim to list the business in several years, the Yomiuri newspaper said.

Fujitsu said in a statement that no decision has been made and a representative declined to comment on how large a stake is being negotiated.

Tokyo-based Polaris was not immediately available for comment.

Fujitsu shares were up 1.6% in a flat broader market.

Fujitsu and other Japanese cellphone manufacturers have been struggling in the global smartphone race, falling quickly behind rivals Apple Inc, SamsungElectronics Co and cut-price Chinese manufacturers.

Fujitsu has been unloading other non-core businesses as well. Last year, LenovoGroup agreed to buy a majority stake in Fujitsu’s personal computer unit for up to $269 million in a bid to capture a larger share of a market that is battling weak sales as more people switch to mobile devices.

The Nikkei added that retaining the mobile division’s staff and factories will likely be a condition of the deal. The company, which wants to focus on its core information technology services business, is also expected to continue operating its Arrows brand under Polaris, Nikkei said.

Fujitsu, which spun off its mobile phone operations into a separate company in 2016, had drawn interest from other investment funds such as Britain’s CVC Capital Partners Ltd and Chinese personal computer maker Lenovo Group Ltd,the Nikkei reported last year.

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