Panasonic may acquire ailing Sanyo

http://search.japantimes.co.jp/mail/nb20081102a1.html

Sunday, Nov. 2, 2008

Compiled from Kyodo, AP
OSAKA — Panasonic Corp. is looking to buy up Sanyo Electric Co. by acquiring preferred shares from its three major creditors, including Goldman Sachs Group Inc. of the United States, informed sources said Saturday.

Panasonic is expected to nail down a basic agreement on the plan with Goldman, Sumitomo Mitsui Banking Corp. and Daiwa Securities SMBC Co. by yearend, the sources said.



The deal would create Japan's biggest electronics company, a behemoth with annual sales of more than ¥11 trillion. It would also mark the first major step in a full-scale realignment of the Japanese electronics industry.

Sanyo has the world's top share of the market for lithium-ion batteries and is also a strong player in the burgeoning solar cell market.

The acquisition would give Panasonic a dominant share in both fields.

Struggling Sanyo issued ¥300 billion preferred shares to the three financial institutions in 2006. If converted into common shares, the stock would represent about 70 percent of Sanyo's outstanding issues in terms of voting rights.

Buying the 70 percent share would cost Panasonic about ¥620 billion, according to Sanyo's current share price. Sanyo closed at ¥145 on the Tokyo Stock Exchange on Friday, down ¥1 from the previous day.

The cash from selling the shares to Panasonic would also be helpful to the banks, which are starting to feel the effects of the global financial slowdown.


In September, Warren Buffet's Berkshire Hathaway Inc. said it invested at least $5 billion in Goldman Sachs Group Inc. in a deal aimed at shoring up the bank's balance sheets while calming creditors at the height of the crisis. Last week, the Sumitomo Mitsui Financial Group cut its profit forecast for the current fiscal year by 63 percent.

For Panasonic, the recent plunge in share prices may present an opportunity. Sanyo's stock price has fallen almost a third over the last two months.

The deal would place Sanyo Electric under the wing of the Panasonic Group. Their combined group sales totaled about ¥11.22 trillion in fiscal 2007, surpassing the ¥10.9 trillion rung up by industry leader Hitachi Ltd. the same year.

Panasonic, previously known as Matsushita Electric Industrial Co., permanently changed its corporate name in October and has been looking for ways to promote merger and acquisition activities in a bid to attain consolidated sales of ¥10 trillion in the 2009 business year.

Fujitsu-Siemens deal
Kyodo News
Fujitsu Ltd. and Siemens AG of Germany have broadly agreed to let Fujitsu make their fifty-fifty joint venture, Fujitsu Siemens Computers, a wholly owned subsidiary by purchasing Siemens' entire stake, sources said Saturday.

The deal will cost Fujitsu about ¥60 billion, they said.

Fujitsu is trying to revamp the Netherlands-based joint venture by fully taking control of its management.