Toshiba will start preparing for an auction as early as next week to unload Toshiba Medical Systems. Multiple funds, such as U.S.-based Kohlberg Kravis Roberts, might participate as well. Other companies seen as potential buyers include Hitachi, Canon, General Electric unit GE Healthcare and the Samsung group.
The Japanese conglomerate plans to sell at least 51% of the unit, now a wholly owned subsidiary, with the stake expected to fetch hundreds of billions of yen. The first round of bidding will be held in early February, followed by a second round involving two or three leading candidates. A buyer will be chosen by March.
Toshiba Medical Systems leads the Japanese market for computerized tomography equipment and other diagnostic imaging products, with a 30% share. It ranks fourth globally, with a share of more than 10%. It logged 405.6 billion yen ($3.37 billion) in sales in fiscal 2014, and its value is estimated at 500 billion yen.
Toshiba is expected to book a record group net loss of 550 billion yen for fiscal 2015, partly due to the cost of large-scale restructuring. The health-care segment, centering on medical equipment, likely will be the only mainline business to report an operating profit. The company decided in December to sell Toshiba Medical Systems, as putting its fiscal house in order is the priority.
More electronics makers are focusing on medical equipment. Sony entered a capital and business alliance with Olympus in 2012 and has expanded into cell and genome analysis. It is targeting sales of 200 billion yen for its medical business in 2020.
Fujifilm, whose business lines include pharmaceuticals and medical equipment such as X-ray systems, logs annual medical-related sales of about 400 billion yen. Acquiring Toshiba Medical Systems likely would provide synergy, as little overlap exists between the two companies' products.