Istanbul: Turkey's Arcelik AS is in advanced talks to take over Japanese industrial conglomerate Hitachi Ltd.'s overseas home appliance business, people with knowledge of the matter said.
An agreement may be reached as soon as the next few weeks, the people said, asking not to be identified because the information is private. The transaction could be valued at around $500 million, according to the people.
The potential deal would add to the $83 billion of divestments announced by Japanese companies this year, up 38% from a year earlier, according to data compiled by Bloomberg. Hitachi has separately invited bids for its listed metals unit as it seeks to streamline its business, Bloomberg News has reported. It also exited a U.K. nuclear project in September.
Istanbul-based Arcelik has been discussing different deal structures that could include an outright purchase or forming a joint venture, the people said. A transaction wouldn't include Hitachi's domestic white-goods operations, which the Japanese company plans to keep, according to the people.
No final decisions have been reached, and talks could still drag on or fall apart, the people said. The Hitachi business has previously attracted interest from other suitors, according to the people. A representative for Arcelik declined to comment, while a spokesperson for Hitachi couldn't immediately be reached outside regular business hours.
Arcelik, one of Turkey's biggest household appliance makers, sells products under 12 brands including Beko, Flavel, Grundig and Altus, according to its website. It has expanded through acquisitions over the years, purchasing companies including South Africa's Defy Appliances Pty and Pakistan's Dawlance Group.
The Turkish company has singled out the Asia Pacific region as a key growth market and last year agreed to buy control of the company that operates the Singer brand in Bangladesh.