(Bloomberg) -- Fujitsu Ltd. aims to jumpstart stalled negotiations to sell a $730 million stake in its air-conditioning business, a deal that may help propel its expansion into a hot nascent market for AI services.

The Japanese icon, which is disposing of consumer-oriented businesses, remains in talks with multiple parties for a speedier sale of Fujitsu General Ltd., Chief Executive Officer Takahito Tokita said in an interview. The urgency to close has grown against the backdrop of escalating geopolitical and economic uncertainty, which is roiling company valuations. Fujitsu General’s shares reversed losses and gained as much as 3.4% in late Tokyo trading after Tokita’s comments.

Fujitsu has held talks with potential buyers including Bain Capital and KKR & Co. for the sale of its 44% stake, Bloomberg News has reported. But the negotiations have bogged down over price. The stake is worth about ¥104 billion ($728 million) based on the latest share price. 

“A quick decision followed by a speedy process is absolutely critical,” Tokita said. “I’m conscious that the amount of time it has taken so far isn’t ideal.” 

Investors are weathering the worst year for mergers and acquisitions globally in a decade. But many are pinning their hopes in Japan in 2024, given growing interest from abroad. This year’s volume of deals involving Japanese companies has surged 45% from a year earlier, data compiled by Bloomberg shows.

“Unloading these could help Fujitsu better realign its resources, similar to Hitachi’s decade-long restructuring,” Bloomberg Intelligence analysts Ian Ma and Takeshi Kitaura wrote. “Yet, as the profitability of Fujitsu’s IT business trails Shinko, it will be interesting to see how quickly Fujitsu can transform its business portfolio once the deal is finalized as early as in fiscal 2025.”

Fujitsu, which in its heyday made everything from laptops and supercomputers to chips, phones and appliances, has already hived off much of its consumer lineup to focus on communications and information technology for businesses. Battery manufacturer FDK Corp. is another unit up for sale.

In a separate deal, Fujitsu agreed to sell its chip packaging subsidiary Shinko Electric Industries Co. to a group led by the government-backed Japan Investment Corp. for about $2 billion. That sale took years of negotiations, once attracting interest from foreign private equity firms including Apollo Global Management Inc., Bain and KKR. 

“Now that it’s settled, it’s surely a positive development,” Tokita said. “There’s no change in our broader plans to strip out non-core businesses.”

Like fellow Japanese icons Hitachi Ltd. and Toshiba Corp. — whose fortunes have waxed and waned — Fujitsu is trying to transform itself into a technology giant for the digital era. 

One of its target industries is manufacturing. The Japanese company offers AI services that help producers boost efficiency and cut emissions by calculating optimal production and logistics. It aims to devise faster transport routes for instance, or make more accurate demand forecasts.

Fujitsu wraps those services under the Uvance brand, meaning universal advance. It aims to more than triple revenue from Uvance products to ¥700 billion ($4.9 billion) by fiscal 2025 from ¥200 billion in fiscal 2022. This means the business could account for about 17% of Fujitsu’s revenue. 

“People often ask me what kind of company Fujitsu is. Is it now an electric company or what,” Tokita said. “But for the past few years, I’ve been telling them we are a technology company. We don’t call ourselves a service company or a solutions company. We even stopped using the term IT company.”

While Fujitsu struggles to get that message across, the market remains glued to the sale of its assets and how they impact the bottom line. Citi analysts Kota Ezawa and Takero Fujiwara wrote this month that Fujitsu’s share price, which had risen over 20% from an October low, is likely to lose momentum.

“The sale of the Shinko shares is an important event for Fujitsu and has been a catalyst for the firm’s share price,” they wrote. “This catalyst is already exhausted. We do not expect the firm to immediately channel the cash gained from the sale into additional buybacks and posit that it will decide how to use the funds later in the remaining two and a half years of the medium-term plan.”

--With assistance from Takako Taniguchi.

(Updates with analysts’ commentary in the sixth paragraph)

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