Midea to buy majority interest in Toshiba's home appliance business

Japanese electronics giant Toshiba Corp said on Thursday it had agreed to sell its home appliances business to Chinese Media Group Co Ltd.

The two companies jointly announced they have signed a memorandum of understanding on Toshiba's sale to Midea of a majority interest in its home appliance business.

A definitive agreement is expected to be finalized by the end of this month, with the two companies negotiating details.

Under the agreement and upon completion of the transaction, Toshiba's home appliance unit will continue to develop, manufacture and sell white goods and other small domestic appliances under Toshiba's brand name.

Toshiba's white goods business posted sales of 225 billion yen ($2.01 billion) in fiscal 2014. It announced a rebuilding initiative last year, which includes the potential reorganization of its home appliance business.

In the past 20 years, Toshiba and Guangdong-based Midea have built up a strong relationship in several areas, including compressors, small domestic appliances and inverters. The proposed transaction is expected to further enhance the collaboration of two companies.