Chinese TV manufacturer Hisense has today announced it will acquire Sharp America's TV business for the North and South American markets in a deal worth $23.7 million.
Hisense Group today released a statement confirming it would purchase "all equity and assets of Sharp's TV factory in Mexico for $23.7 million with rights to use the 'Sharp' brand name and all its channel resources in both North and South American regions."
In a TV market dominated by the likes of LG, Samsung, Sony and Panasonic, this deal will see Hisense become a serious contender in the Americas, and also marks a broader shift by Chinese brands to grab a bigger slice of the consumer market in the region. Having manufactured flat panels for more than a decade, Hisense is well-placed to capitalise on potential growth in an industry with its eyes set on 4K and OLED TV technologies, and to capture consumers looking for an established brand with a lower price tag.
Sharp Corporation, the 103-year-old Japanese electronics company, was an early investor in LCD technology but has struggled in recent years to keep up with Korean and Chinese competitors. Sharp has championed innovations like a fourth sub-pixel (yellow) to enhance picture quality in LCD and this year has added Android TV to its line up.
While the Sharp name may endure on retail shelves as Hisense gains the right to continue using the brand, Sharp's American operation will otherwise move from Japanese hands and come under full ownership of the Qingdao-based Chinese company.
Founded as a small radio factory China in 1969, Hisense is an established manufacturer of major appliances and whitegoods, TVs, tablets and laptops, and claimed "overseas sale revenue" of $2.6 billion in 2014. A strong brand in China, the company now sells in 130 countries worldwide.
But while Hisense continues to be a strong brand in the Chinese market, similar to fellow Chinese players TCL, Haier and Changhong, it has been pushing to achieve the market dominance and brand awareness enjoyed by Korean heavyweights Samsung and LG, and Japanese powerhouse Sony.
The company has been pushing to distinguish itself from rivals, partnering with Roku in 2014 to produce a line of flat panels for the US market with Roku streaming built-in. It also took to the stage at CES in Las Vegas this year toincluding the Vidaa Max short-throw laser projector and the Chill, an in-home beverage vending machine.
The company has also been on a marketing offensive for broader recognition outside its homeland, with sponsorship deals for the Nascar Xfinity Series in the US and the F1 Grand Prix.
But while Hisense may not have broken into the 'big four' TV brands outside Asia, it is joining other Chinese manufacturers such as TCL in making a strong impression on the global AV market. With a strong presence at CES in recent years, these Chinese challenger brands are making a strong play in the 4K space, bolstering their smart TV offerings and slowly but surely becoming a force to be reckoned with.
While the deal will see Sharp America hand over its TV manufacturing capabilities and branding to Hisense for the consumer market, the company will remain in a number of other categories in the Americas.
"Sharp Electronics will continue to grow and invest in its line of consumer home appliances," said a company spokesperson. "Also unchanged is the sales and marketing through authorized distributors of Sharp's entire B2B product portfolio, including displays."
Hisense did not respond to request for comment.
Update, August 3 at 10:15 a.m. AEST: Added comment from Sharp.