Japan's largest consumer electronics company, Panasonic, plans to launch a tender offer for shares of Sanyo Electric with the hope of acquiring a majority stake in its smaller rival, it said Friday.
The offer, which has been anticipated for several weeks, was finalized at board meetings of the two companies on Friday and could see Sanyo become a unit of Panasonic within the first quarter of 2009.
Panasonic sees several benefits in acquiring Sanyo. The company is the world's biggest manufacturer of lithium-ion batteries and an innovator in green-energy products such as solar cells, which are both business areas Panasonic is keen to get into. Panasonic has a sizeable battery business and sees a combination of the two companies as key to growing in the emerging hybrid electric vehicle market and electric vehicle market. Panasonic also thinks it can grow Sanyo's solar business.
The two companies are also linked in history. When Konosuke Matsushita started Matsushita Electric Devices Manufacturing Co., the forerunner to today's Panasonic, in 1918 to make electric plug adapters for light sockets he took on a small number of staff including brother-in-law Toshio Iue. In 1947 Iue would go on to start Sanyo Electric. Today the two companies remain based in Osaka and their headquarters are only a short drive apart.
The acquisition, which is unusual in Japan's conservative business world, has been the subject of discussions between Panasonic and Sanyo's three biggest shareholders for the last few weeks.
Japanese financial groups Sumitomo Mitsui and Daiwa Securities and U.S.-based Goldman Sachs bought roughly
Panasonic originally offered
To pay for the acquisition Panasonic said it would offer up to