Sony and TCL Electronics equity transfer enters final negotiations, may be announced as soon as this month

On March 23, Bloomberg reported that people familiar with the matter revealed that Sony Group Corp. is about to reach a binding agreement to sell a majority stake in its home entertainment business to Chinese competitor TCL Electronics Holdings Ltd., a transaction that may be valued at about US$1 billion (approximately 6.892 billion yuan at the current exchange rate).

People familiar with the matter said that negotiations between the two parties have made progress and are striving to announce the transaction as soon as this month. They said that while negotiations were at an advanced stage, no final decision had been made.

Spokespersons for Sony and TCL Electronics said that the two companies are continuing to negotiate to reach a final agreement, which will be announced as soon as it is finalized.

In January this year, Sony and TCL Electronics announced plans to establish a joint venture for Sony's home entertainment business, including its Bravia TV brand. According to the memorandum of understanding, Sony will hold 49% of the joint venture's shares, and TCL Electronics will hold the remaining 51%.

According to a statement released in January, the new joint venture will begin operations in April 2027 and produce TVs equipped with Sony and Bravia brands but using TCL Electronics display technology.

From a supply chain perspective, Sony currently mainly purchases mid- to high-end panel products. After the establishment of the joint venture, with TCL Electronics becoming the dominant party, the overall procurement strategy is bound to be more highly integrated. It is expected that TCL CSOT, a subsidiary of TCL Technology, will play a key role in the joint venture, and the proportion of panel supply is expected to increase significantly. In addition, AUO, which has strengthened its cooperative relationship with TCL Electronics in recent years, may have a chance to increase its shipment volume in the future with the establishment of the joint venture, benefiting from the supply of high-end panels.

Looking back at history, Japanese brands once held nearly 40% of the global TV market share. However, due to the rapid rise of Chinese brands and price competition, Toshiba, Funai, and Panasonic successively switched to licensing or selling TV businesses. As the joint venture between TCL Electronics and Sony awaits regulatory approval, the overall market share of Chinese brands in the global TV market is expected to further advance to 50%, and the trend of market dominance transfer will become more clear. (Source: IT House, TrendForce Display)

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