Panasonic likely to delay turning Sanyo into subsidiary until summer+

OSAKA, Jan. 29 Kyodo - Panasonic Corp. will likely delay turning Sanyo Electric Co. into its subsidiary until around this summer due to the time-consuming process under U.S. antitrust laws to evaluate the two firms' world-class lithium ion battery businesses, sources familiar with the matter said Thursday.

Panasonic initially planned to complete a tender offer for Sanyo shares by the
end of March in a move that will create Japan's largest electrical machinery
maker in terms of sales, the sources said.
With both companies facing deteriorating business conditions amid the global
economic slowdown, observers warned of adverse impacts on their management
strategies from the screening delay.
The U.S. Department of Justice requires submission of documents before a
large-scale merger or before a company turns into a subsidiary to study the
impact on markets, but the screening process for Panasonic and Sanyo could drag
on until May or even August, they said.
''It's impossible to begin (the tender offer) by the end of March, but there is
nothing we can do,'' an official involved in the deal said.
According to the Japan Economic Center, a private research agency, Sanyo held
the top share in the global market for lithium ion batteries in fiscal 2007
while Panasonic ranked fifth.
Lithium ion batteries are believed to be key to producing next-generation green
cars like hybrids, but experts said the procedural process in the United States
is likely to be lengthy in consideration of the Big Three automakers such as
General Motors Corp.
Panasonic had hoped to boost its rechargeable battery operations and gain
access to the solar-cell business through acquiring Sanyo as it looks
increasingly likely that it will report a consolidated net loss for the current
business year through March.
==Kyodo
2009-01-29 22:01:17