Sony sells battery business to Murata

Sony has agreed to sell its lossmaking battery business to Apple supplier Murata Manufacturing in a deal that could create a new player in the growing market to power electric vehicles.
Selling the unit — for an undisclosed price — marks a reversal for Sony, after years of resisting Japanese government efforts to create a national champion in batteries to compete against the Korean rivals Samsung SDI and LG Chem.

For Murata — which is the world’s biggest supplier of energy-storing ceramic capacitors used in Apple and Samsung smartphones — the acquisition is part of a strategy to expand into cars, healthcare and energy sectors.

Murata said it eventually wants to use Sony’s battery technology, now mainly used for smartphones and power stations, in the automotive space, to charge electric cars. This could position it as a rival to Panasonic, which makes batteries for Tesla’s electric vehicles.

Sony batteries - photo credit Reuters

Sony batteries – photo credit Reuters

Sony, the Japanese electronics and entertainment group, was the first company to roll out a commercial lithium-ion battery in 1991. But its battery business has been mostly lossmaking since 2010, leading to a writedown of nearly $600m in the past three years.

Under the sale terms, 8,500 of Sony’s employees will transfer to Murata, although the deal excludes certain of Sony’s consumer products such as alkaline and USB batteries.

Murata has been doing research on lithium ion batteries since 2009 but has not yet succeeded in releasing a product. Company officials said they hoped to use a client network in smartphones to strengthen Sony’s battery business.

Analysts, however, questioned whether Murata had the expertise to fix Sony’s battery operations and position itself in a highly competitive market where many players have struggled to generate profits.

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