It’s official: Sanyo sells handset division to Kyocera for $375M: Kyocera inherits major portion of Sprint Nextel portfolio

Sanyo Electric Co. Ltd. will sell its ailing handset business — and wireless infrastructure assets — to Kyocera Corp. for about $375 million, the two companies announced.
Sanyo’s handset unit had been among the top ten original equipment manufacturers (OEM) in the world and a major supplier to troubled Sprint Nextel Corp., which has lost hundreds of thousands of subscribers over the past year. Only a year ago, Sanyo supplied nearly 40% of the handsets in Sprint Nextel’s portfolio.
The sale had been anticipated for some time. Last October the two companies acknowledged ongoing talks over such a sale. In September 2007, Sanyo sold its handset distribution and sales support unit. In 2006, Sanyo retreated from the European 3G market to focus on its business with Sprint Nextel and domestic sales in Japan.
In North America, Kyocera will operate the former Sanyo Wireless unit as a wholly owned subsidiary based in Chatsworth, Calif., beginning April 1. Those operations will in the near term remain separate from Kyocera Wireless Corp.’s own ongoing handset business, based in San Diego. Kyocera, which makes a variety of electronics kit, is based in Kyoto, Japan.
The sale, however, appears to carry even greater importance for Kyocera on the telecom equipment side. The company said that its goal in the transaction is to strengthen its telecom equipment business; Kyocera will acquire research-and-development assets, intellectual property including patents and about 2,000 employees, all of whom will be retained, the company said.
Kyocera said the acquisition would help it grow the annual revenue of its telecom equipment business, a sector that has seen major tie-ups in the past two years as the market tightened.
Many analysts had forecast over the past year that the increased accumulation of market share by the top five OEMs – Nokia Corp., Motorola Inc., Samsung Electronics Co. Ltd., LG Electronics Co. Ltd. and Sony Ericsson Mobile Communications — would force some smaller handset businesses to explore merger and acquisitions, particularly Japanese handset OEMs, which face domestic competition among themselves. In 2006, Sanyo ranked No. 9 in global handset OEM standings, with only 1.5% of the market, according to Strategy Analytics.
In the fiscal 2006-2007 year, Sanyo Electric Co. Ltd., the handset business’ parent, lost nearly a half-billion dollars, with mobile phones, digital cameras and air conditioners taking a sharp fall in sales.
“Sanyo” means “three oceans” in Japanese and the parent company oversees 83 manufacturing companies and 75 other companies.