ID :
29054
Sat, 11/08/2008 - 14:17
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https://oananews.org//node/29054
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Panasonic to acquire Sanyo to form world's No. 2 appliance group+
TOKYO, Nov. 7 Kyodo - Panasonic Corp. and Sanyo Electric Co. said Friday they will begin talks on forming a capital and business alliance with the aim of turning Sanyo into a Panasonic subsidiary in a deal to create the world's second-largest electric appliance group.
Panasonic President Fumio Otsubo said in a joint press conference with his
Sanyo counterpart Seiichiro Sano that Panasonic intends to acquire a majority
equity stake in its smaller rival.
Panasonic is expected to launch a tender offer for Sanyo shares with an eye to
making the company a subsidiary by next spring, company sources said.
A combination of Panasonic and Sanyo means the advent of the world's No. 2
electric appliance group in terms of sales after General Electric Co. of the
United States. The deal will also mark the first full-scale realignment of the
domestic electronics industry involving major companies.
An acquisition of Sanyo, the world's largest supplier of lithium ion batteries,
would help Panasonic to boost its rechargeable battery operations and gain
access to the solar-cell business.
For Sanyo, coming under the wings of Panasonic will enable the company to
utilize Panasonic's global sales networks to expand its solar and energy
business, the firms said.
''We want to maximize our corporate value through the collaboration of the two
companies, which have similar ideals,'' Otsubo said at the press conference in
Osaka, which was simultaneously televised to a Tokyo hotel.
He added the purpose of joining hands with Sanyo is to enhance the
international competitive edge of the two companies by sharing their management
know-how and resources.
Otsubo said Panasonic will try to keep Sanyo's brand and employment as much as
possible in acquiring the company, but pointed to a possibility of reviewing
them in the future.
Sano said the global financial crisis, which erupted in September, prompted
Sanyo to think about the prospective sale by its major creditor financial
institutions of their preferred shares in Sanyo ''earlier than planned.''
''While prospects for our business circumstances are extremely unclear, this
deal (with Panasonic) is a big chance for us to achieve our medium-term
business plan,'' he said.
Panasonic will shortly start assessing Sanyo's assets and businesses, and
negotiating with Sanyo's three major creditor institutions -- Goldman Sachs
Group Inc. of the United States, Sumitomo Mitsui Banking Corp. and Daiwa
Securities SMBC Co. -- to buy their preferred Sanyo shares.
The two Osaka-based electronics makers said they will announce the progress
achieved during their talks by the end of this year but may make an
announcement earlier if they reach a certain accord.
At their respective extraordinary board meetings earlier in the day, the two
companies agreed to secure Sanyo's business independence in forming an
alliance, the company sources said.
Struggling Sanyo received about a 300 billion yen bailout from the three
financial institutions in 2006 in exchange for preferred shares.
If converted into common shares, the preferred shares that the three creditors
own will represent about 70 percent of Sanyo's outstanding shares in terms of
voting rights.
Panasonic and Sanyo said that among possible areas of business collaboration is
supplementary technological assistance to each other on rechargeable batteries.
''We believe the deal will enable our household fuel cells and solar cells, the
two energies for the future, to generate synergy effects and grow within our
group,'' Otsubo said.
In the electronics and ecology business segments, the two companies could
expand the range of products and utilize each other's sales channels and
technologies to cut manufacturing and development costs, they added.
Panasonic and Sanyo expect combined group sales of about 11.22 trillion yen for
fiscal 2008, surpassing the 10.9 trillion yen Japan's industry leader Hitachi
Ltd. foresees for the same fiscal year.
Panasonic changed its corporate name to the current one from Matsushita
Electric Industrial Co. in October. The group has been looking for ways to
promote merger and acquisition activities in a bid to attain consolidated sales
of 10 trillion yen in the 2009 business year.
Unlike other rivals such as Sony Corp. and Toshiba Corp. which saw sharp
earnings deterioration in the April to September period, Panasonic reported a
record-high net profit of 128 billion yen for the period, due to brisk sales of
flat-panel TVs and DVD recorders.
Sanyo, which returned to the black in fiscal 2007 after losing money for three
years, said its net profit for the April-September period swelled 104.3 percent
from a year earlier to 32.65 billion yen on the sale of its mobile phone
business to Kyocera Corp.
But operating profit fell 11.3 percent to 23.97 billion yen, as the yen's
surge, higher material costs and falling semiconductor prices eroded stronger
rechargeable battery sales.
Sanyo's founder Toshio Iue was a relative of Matsushita founder Konosuke
Matsushita and worked for Matsushita before establishing Sanyo in 1947.
==Kyodo
Panasonic President Fumio Otsubo said in a joint press conference with his
Sanyo counterpart Seiichiro Sano that Panasonic intends to acquire a majority
equity stake in its smaller rival.
Panasonic is expected to launch a tender offer for Sanyo shares with an eye to
making the company a subsidiary by next spring, company sources said.
A combination of Panasonic and Sanyo means the advent of the world's No. 2
electric appliance group in terms of sales after General Electric Co. of the
United States. The deal will also mark the first full-scale realignment of the
domestic electronics industry involving major companies.
An acquisition of Sanyo, the world's largest supplier of lithium ion batteries,
would help Panasonic to boost its rechargeable battery operations and gain
access to the solar-cell business.
For Sanyo, coming under the wings of Panasonic will enable the company to
utilize Panasonic's global sales networks to expand its solar and energy
business, the firms said.
''We want to maximize our corporate value through the collaboration of the two
companies, which have similar ideals,'' Otsubo said at the press conference in
Osaka, which was simultaneously televised to a Tokyo hotel.
He added the purpose of joining hands with Sanyo is to enhance the
international competitive edge of the two companies by sharing their management
know-how and resources.
Otsubo said Panasonic will try to keep Sanyo's brand and employment as much as
possible in acquiring the company, but pointed to a possibility of reviewing
them in the future.
Sano said the global financial crisis, which erupted in September, prompted
Sanyo to think about the prospective sale by its major creditor financial
institutions of their preferred shares in Sanyo ''earlier than planned.''
''While prospects for our business circumstances are extremely unclear, this
deal (with Panasonic) is a big chance for us to achieve our medium-term
business plan,'' he said.
Panasonic will shortly start assessing Sanyo's assets and businesses, and
negotiating with Sanyo's three major creditor institutions -- Goldman Sachs
Group Inc. of the United States, Sumitomo Mitsui Banking Corp. and Daiwa
Securities SMBC Co. -- to buy their preferred Sanyo shares.
The two Osaka-based electronics makers said they will announce the progress
achieved during their talks by the end of this year but may make an
announcement earlier if they reach a certain accord.
At their respective extraordinary board meetings earlier in the day, the two
companies agreed to secure Sanyo's business independence in forming an
alliance, the company sources said.
Struggling Sanyo received about a 300 billion yen bailout from the three
financial institutions in 2006 in exchange for preferred shares.
If converted into common shares, the preferred shares that the three creditors
own will represent about 70 percent of Sanyo's outstanding shares in terms of
voting rights.
Panasonic and Sanyo said that among possible areas of business collaboration is
supplementary technological assistance to each other on rechargeable batteries.
''We believe the deal will enable our household fuel cells and solar cells, the
two energies for the future, to generate synergy effects and grow within our
group,'' Otsubo said.
In the electronics and ecology business segments, the two companies could
expand the range of products and utilize each other's sales channels and
technologies to cut manufacturing and development costs, they added.
Panasonic and Sanyo expect combined group sales of about 11.22 trillion yen for
fiscal 2008, surpassing the 10.9 trillion yen Japan's industry leader Hitachi
Ltd. foresees for the same fiscal year.
Panasonic changed its corporate name to the current one from Matsushita
Electric Industrial Co. in October. The group has been looking for ways to
promote merger and acquisition activities in a bid to attain consolidated sales
of 10 trillion yen in the 2009 business year.
Unlike other rivals such as Sony Corp. and Toshiba Corp. which saw sharp
earnings deterioration in the April to September period, Panasonic reported a
record-high net profit of 128 billion yen for the period, due to brisk sales of
flat-panel TVs and DVD recorders.
Sanyo, which returned to the black in fiscal 2007 after losing money for three
years, said its net profit for the April-September period swelled 104.3 percent
from a year earlier to 32.65 billion yen on the sale of its mobile phone
business to Kyocera Corp.
But operating profit fell 11.3 percent to 23.97 billion yen, as the yen's
surge, higher material costs and falling semiconductor prices eroded stronger
rechargeable battery sales.
Sanyo's founder Toshio Iue was a relative of Matsushita founder Konosuke
Matsushita and worked for Matsushita before establishing Sanyo in 1947.
==Kyodo
