TOKYO: Japan’s Hitachi Ltd. plans to sell about 60 of its stake in its overseas home appliance business to Turkish home appliance giant Arcelik A.S. for about 300 million dollars, sources said Monday.

Hitachi aims to improve the business’ earning power by jointly operating it with Arcelik, which has advantages in Europe and the Middle East.

Hitachi is expected to announce the sale of the overseas business of home appliance unit Hitachi Global Life Solutions Inc. as early as this week.

Hitachi hopes to increase its competitiveness by utilizing Arcelik’s sales networks and purchasing power while maintaining the Hitachi brand, the sources said.

Hitachi will continue to operate its domestic home appliance business as usual.

Competition in the overseas home appliance market is intensifying, particularly because of a rise of Chinese makers.

Hitachi aims to increase its consolidated operating profit rate to over 10 pct in the year through March 2022.

To hit the target, the company needs to improve the low profit rate at its home appliance business, which stood at 4.9 pct in the year that ended in March 2020.

In 2015, Hitachi sold about 60 pct of its stake in its overseas air conditioner business to a U.S. company. The two sides run the business together.

JIJI Press