Panasonic Close to Sealing the Deal with Sanyo

Panasonic, formerly known as Matsushita Electric, is now reported to be closer to its goal of acquiring Sanyo Electric, a move that will enable the company to become Japan's second largest manufacturer of electronics. Goldman Sachs is said to have agreed to sell all of its holdings, which account for a 29 percent stake in Sanyo, a decision that it reached after Panasonic sweetened its initial offer, thus taking the deal to a total worth of at least US$6.4 billion.

 

Panasonic has been trying to purchase Sanyo Electric for a while now, but the company found it hard to convince Goldman Sachs, which, unlike the other two major Sanyo shareholders (Daiwa Securities SMBC Co. and Sumitomo Mitsui Banking Corp.), refused to take up Panasonic's lower initial offer. However, with a price per share of 131 yen, or approximately US$1.48, the deal between the two companies is reported to be worth at least US$6.4 billion.

 

Upon news of the deal getting out, the company's shares closed down 1.4 percent to 141 yen, mainly due to the fact that the 131 yen price per share offered by Panasonic is lower than Sanyo's current share price.

 

The two companies are expected to hold a news conference on Friday to provide details on the planned offer, which was basically just 1 yen above what Panasonic had offered earlier this month.

 

With the acquisition, Panasonic is expected to become Japan's second electronics manufacturer after Hitachi, with a $120 billion in annual sales. Currently the world's largest plasma TV maker and a top producer of rechargeable batteries, Panasonic would also gain a significant part of the solar power equipment market, a segment that is considered to have plenty of potential.

 

“Adverse business conditions are making it difficult for us to achieve the kind of growth we have been striving for," Panasonic President Fumio Ohtsubo said during a news conference, early last month. "We need a new growth engine within our group."