Panasonic and smaller Japanese electronics rival Sanyo are starting talks on a capital and business alliance and aim for a buyout deal by year’s end, hoping to work together in solar cell, battery and other businesses, both sides said yesterday.
The presidents of the two companies — Panasonic president Fumio Ohtsubo and Sanyo president Seiichiro Sano — were due to hold a joint news conference yesterday in Osaka. The decision to pursue talks to make Sanyo a Panasonic subsidiary came at board meetings yesterday.
“Panasonic and Sanyo will start discussions with the aim of maximizing both companies’ corporate values by pursuing synergies between both companies,” they said in a statement.
Speculation has been rife cash-rich Panasonic Corp is interested in buying Sanyo Electric Co, which has been struggling to turn itself around.
But more time is likely needed for a deal with Sanyo’s biggest stakeholders, Goldman Sachs Group Inc of the US and Japanese banks Sumitomo Mitsui Banking Corp and Daiwa Securities SMBC. Those companies invested ¥300 billion (US$3 billion) in Sanyo in 2006, and hold about a combined 70 percent stake in Sanyo.
Adding Sanyo to Panasonic would create Japan’s biggest electronics maker, surpassing Hitachi Ltd., and become one of the world’s largest.
Analysts say Panasonic is eyeing Sanyo’s green energy businesses — solar panels and batteries — both areas that could prove lucrative in coming years.
Panasonic, which changed its name from Matsushita Electric Industrial Co last month, is a leading maker of flat-panel TVs, digital cameras and DVD players. But it does not have its solar cell operations.
By gaining Sanyo’s powerful lithium-ion battery business for cars, Panasonic can hope for a significant global share when combined with its own battery operations. Panasonic makes auto batteries with Toyota Motor Corp.
But Sanyo’s appliance division could prove a burden because of overlap in appliances and digital gadgets.
The companies said they hoped to reduce production and development costs by working together on technology and joint procurement.
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