NAGOYA -- Automotive technology supplier Denso is in talks to increase its interest in car navigation system maker Fujitsu Ten to a majority stake.
Denso, a Toyota Motor group company, will purchase shares from Fujitsu Ten parent Fujitsu in a deal said to be worth tens of billions of yen. Denso is strengthening development of auto safety technologies. Amid intensifying competition with European and U.S. parts makers, the company aims to get its hands on information technology specialists.
Fujitsu now owns 55% of Fujitsu Ten, while Denso has a 10% stake. Under a basic agreement announced Friday, Denso's interest will rise to 51% as Fujitsu's falls to 14%. Toyota's 35% stake will remain unchanged.
Details will be hashed out later, with the trio expecting to reach a final agreement by the end of fiscal 2016. The acquisition will likely close in the first half of fiscal 2017. Fujitsu Ten logged sales of 363.3 billion yen ($3.53 billion) and a 5.4 billion yen operating profit for fiscal 2015 but chalked up a net loss of 1.2 billion yen. Denso will be pushed to find a way to lift Fujitsu Ten into the black quickly.
Fujitsu Ten produces vehicle radar technology that senses the immediate environment and engine control units. It is strong in the car audio systems that Denso hopes to put in the cockpits of its self-driving vehicles to create synergies.
Denso is focusing on development of artificial intelligence technology for cars and will launch its new advanced driving assistance systems division in January to accelerate such efforts. Denso, previously reliant largely on in-house innovation, is now actively collaborating with companies outside its group via such means as forming domestic and international joint ventures.
Technology specialists have been the biggest issue for Denso. It welcomed robotics and computer science professor Takeo Kanade of U.S.-based Carnegie Mellon University as a technology adviser in August, hoping to leverage his connections. Denso hopes to capitalize on Fujitsu Ten's wealth of talent.