Panasonic's Sanyo tender offer succeeds

Thursday, Dec. 10, 2009

OSAKA (Kyodo) Panasonic Corp. has successfully completed its tender offer for Sanyo Electric Co. shares, paving the way for turning its smaller rival into a subsidiary this month, sources said Wednesday.

The deal should result in creation of one of the world’s largest consumer electronics conglomerates.

By making Sanyo its subsidiary, Panasonic is expected to begin full-scale cooperation with the company on rechargeable batteries and energy operations.

At the same time, reorganizing overlapping operations, including the manufacture and sale of appliances such as refrigerators, washing machines and audiovisual equipment, will likely be among the key issues to be resolved, the sources said.

The tender offer was concluded following an application for a majority of Sanyo’s outstanding shares, they said, adding that the result was to be formally announced Thursday.

Panasonic is set to announce early next year a new business policy for a three-year period beginning in April in which the company is expected to state that expanding energy business will form the core of its operations, they said.

Panasonic sees solar batteries and lithium ion batteries as products that will produce a synergy effect. Under their partnership, Sanyo is expected to utilize its technology to produce solar batteries while Panasonic will handle sales.

With the rechargeable lithium ion battery business for cars likely to expand, the two companies intend to heighten their global competitiveness by blending their respective technologies, the sources said.

To ensure a smooth partnership, Panasonic will send several of its executives to Sanyo. Both companies have agreed to maintain the Sanyo brand for the time being, but Panasonic is highly likely to seek to streamline operations including reducing the number of Sanyo personnel, the sources also said.

Panasonic announced the plan to make Sanyo a subsidiary in November 2008, saying the tender offer would take place last spring. The delay in achieving the goal was mainly due to difficulties in clearing antitrust laws in countries where Panasonic and Sanyo operate.