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Panasonic will buy rival Sanyo

by on10 November 2008

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Consolidation in electronics manufacturing industry

Panasonic, the world’s top plasma TV manufacturer has announced that it will acquire its smaller rival, Sanyo Electric. The deal is rumored to cost about $8.8 billion. 

The acquisition of Sanyo will make Panasonic Japan’s top electronics manufacturer, surpassing Hitachi, and will strengthen Panasonic’s edge in solar power equipment and in the growing market for rechargeable batteries in cell phones, PCs and automobiles. 

Sanyo provides nickel metal hydride batteries to Honda Motor and Ford Motor Company, and lithium ion batteries for Volkswagen automobiles, while Panasonic has an automobile venture with Toyota Motor.

Panasonic could also get a foothold in the developing solar market with the acquisition, as Sanyo is the seventh-largest solar cell manufacturer in the world. However, Panasonic has not indicated what it would do with Sanyo’s loss-generating businesses, which includes home appliances and microchips. Sanyo and Panasonic have reportedly agreed in principle to a deal, but the actual price of the deal has not been announced.

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

In order to purchase Sanyo, Panasonic must buy out the three top shareholders of Sanyo: Goldman Sachs, Sumitomo Mitsui Banking and Daiwa Securities SMBC. These three hold nearly 430 million preferred shares of Sanyo, which if converted could equal a combined 70 percent stake.

Last modified on 10 November 2008
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