Panasonic Corp. (PC) announced the acquisition of SANYO Electric Co Ltd. (SANYY), which will bring greater expertise in two areas – batteries and solar panels. Sanyo is a leading company in the rechargeable battery business focused on lithium-ion rechargeable batteries. Panasonic is one of the leading manufacturers of electronic and electrical products, systems and components.
Panasonic said that it has completed the tender offer to acquire approximately 3.1 billion shares of SANYO (or more than 50% of the company’s total shares) for approximately $4.6 billion (403.8 billion yen). The tender offer was planned for Nov 5 through Dec 9 at a price of 131 yen per share. Panasonic will have 50.2% stake in Sanyo.
Panasonic had entered into a capital and business alliance agreement with SANYO in Dec 2008, which could not come into effect due to various regulatory hurdles from anti-monopoly authorities in the U.S., China and the European Union. The tender offer is expected to impact Panasonic’s business results for the fiscal year ending Mar 2010.
The energy business of SANYO will be added as Energy Solutions to Panasonic’s business, which will further expand its HIT (crystalline silicon) solar photovoltaic cells and modules (batteries) business and accelerate the development and commercialization of next-generation solar cells.
By taking over SANYO, Panasonic plans to double production capacity of lithium ion batteries to around 1 million units a year by the middle of 2010. Panasonic expects the alliance to result in a net profit growth of 80 billion yen in fiscal 2013. Panasonic and SANYO will also set up a ‘Collaboration Committee’, in which Panasonic will invest around 100 billion yen to generate synergies for both companies.
This acquisition will enable Panasonic to more aggressively compete with market leaders such as Sony (SNE) and Hitachi (HIT) amid growing demand for the rechargeable power source commonly used in mobile phones, laptop PCs and digital cameras. Moreover, it will help Panasonic become Japan’s largest maker of hybrid car batteries.
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