14 DAY TRIAL // Kyocera has moved from the stage of intending to buy Sanyo Electronic to that of actually doing it. The company is taking care of the final stages in making this acquisition possible and will start profiting from it as soon as possible.
Sanyo is the world's no. 11 handset producer, which makes Kyocera's choice capable of making a strong impact on the mobile phone market. Kyocera, on the other hand, stands on the 10th place in the global ranking, according to this year's second quarter results. After the two companies join forces, they will automatically advance to the 7th place, making a considerably more powerful producer. Japan welcomes this jointing, as their market is already made of a large number of handset producers.
Sanyo has registered profit falls for some time now, which made it first look for a buyer for its microchip unit. Now they have decided to do the same for the cellular unit, which will face restructuring with the help of shareholder Goldman Sachs, in order to bring non-core or struggling businesses to focus on key operations such as rechargeable batteries.
Kyocera would have great profits to gain over the new purchase. The company could make a stronger presence on the US market, where Sanyo has made a good entrance with Sprint Nextel's help. This makes the acquisition an efficient solution for both companies and a great chance for better results. Moreover, it would considerably come closer to the level that leading handset producers have reached and work its way up to the first positions in the world ranking.
Sanyo relies mostly on mobile phone sales for maintaining its sale levels at a high rate. The company has made 340 billion yen over the period of one year, ending in March. Still, the company's initial estimates for selling about 12.5 million handset units this year have proved to be unrealistic, endangering Sanyo to drop even further in the world classification. Selling the cellular unit to Kyocera, it made a good choice under these terms.