Sanyo in talks to sell mobile phone business

Sanyo Electric is negotiating separately with other Japanese firms Sharp and Kyocera about the sale of its mobile phone handset business arm and aiming to conclude a deal by the end of the year, industry sources, quoted by a Kyodo News report, said.

The Kyodo News report said Sanyo, which used to be a major consumer-electronics maker, plans to pull out of the mobile phone handset business to focus on core areas such as rechargeable batteries and commercial-use equipment to increase profits.

Telecom Sanyo booked an operating loss for the first time in the business year through March 31 due mainly to appraisal losses over inventories, the report said.

It also chalked up a deficit in the April-June period on sales of 47.6 billion yen ($402 million), down 42% from the year before, due to sluggish domestic sales, prompting the company to revise downward its global sales target for the business year through March 2008 to 11 million handsets from an initial 12.5 million handsets.

Sharp and Kyocera are believed to be interested in Sanyo's technology as well as its overseas sales networks, but there is a gap between Sanyo and the two companies in terms of the conditions of any deal including the price, according to the sources.

Sanyo is considering advancing negotiations by putting the sale out to tender, so it could take some time before Sanyo can finalize a deal, the sources added.

Sanyo, based in Osaka, is in the middle of restructuring as it posted a consolidated net loss in the year through March for a third straight year, the Kyodo News report said.