Japan’s Panasonic Corp said yesterday it had cleared the way to acquire struggling Sanyo Electric Co for up to US$9 billion, forming an industry heavyweight amid the global downturn.
The deal is the first major realignment of Japan’s electronics industry since the start of the economic crisis, which has led companies to suspend production as consumer demand dries up.
Panasonic said it would launch a tender offer aiming to secure a 70.5 percent stake in Sanyo, which has been slashing thousands of jobs as it tries to return to profit.
PHOTO: BLOOMBERG
Panasonic said it had reached a deal for a maximum of ¥800 billion (US$9 billion), or ¥131 per share, after investment group Goldman Sachs and others agreed to sell their holdings.
In a joint statement, Panasonic and Sanyo said that the companies had to take “drastic action” to spur revenue and growth in the midst of the financial crisis and intensifying global competition.
“Panasonic and Sanyo believe that together they will evolve into a corporate group which will be highly admired globally” by “coexisting in harmony with the global environment,” they said.
Sanyo, which started off making bicycle lamps after World War II, has recently tried to focus on environmental technologies including solar energy and rechargable batteries.
With the acquisition, the companies hope to team up to expand in the solar business “in which significant future growth is expected,” they said.
Sanyo, which like Panasonic is based in the western Japanese metropolis of Osaka, will remain listed, the statement said.
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