Panasonic is considering buying out three major Sanyo Electric Co shareholders who have agreed to sell each Sanyo share for ¥131 ($1.49 / Rs70.74) through a tender offer.
Panasonic's will pay over ¥60 billion to acquire the 70 per cent total preferred share of Sanyo held by the three major shareholders Daiwa Securities SMBC Co, Goldman Sachs Group Inc and Sumitomo Mitsui Banking Corp. in Sanyo Electric Co.
The merger between Panasonic, the world's biggest plasma TV maker and Sanyo, the top producer of rechargeable batteries, would make Panasonic the second largest electronics manufacturer after Hitachi Ltd.
Goldman Sachs had rejected an initial offer of ¥120 a share as too low, and in early December again rejected the increased offer from Panasonic of ¥30 for its 29 per cent stake in Sanyo Electric Co.
Goldman Sachs reported a huge third quarter loss, amidst plummeting consumer goods sale in the backdrop of the global economic crisis and recession in major global markets may have prompted them to sell the stake to Panasonic to shore up their funds. (See: Goldman Sachs reports first quarterly loss since 1999)
Japanese electronics group Panasonic after months of failed negotiating to acquire stake in Sanyo, a major manufacturer of solar cells and rechargeable batteries is set become Japan's biggest consumer-electronics company. (See: Panasonic in talks to acquire its rival, Sanyo and See: Panasonic looking to acquire Sanyo to create Japan's largest electronics company)
The three major shareholders in Sanyo purchased about ¥300 billion ($3.08 billion) of preferred shares in 2006, equivalent to about 70 per cent voting rights if converted into common stock early next year. Goldman Sachs bought the share by paying 125 billion yen and will now receive 234 billion yen from Panasonic.
Panasonic shares were up 0.3 percent at 1,029 yen, while that of Sanyo slid 3.5 percent to 138 yen by midday on Thursday on news that a deal had been reached below the Sanyo's current share price.
Late last month, Panasonic cut its annual net profit forecast by 90 percent and also informed that the company plans to restructure as sales of TVs and other electronics were slowing down due to the global financial crisis.
Panasonic, already the world's largest plasma TV maker, could become Japan's top electronics firm by sales. The merger entity would give Panasonic a bigger share of the fast-growing market for rechargeable and solar batteries and would also make it the second-largest conglomerate after GE to have an electrical and electronics business
Sanyo holds about 30 per cent of the $6 billion global market for lithium-ion batteries.
Panasonic's takeover of Sanyo would mark the first major shake-up of Japan's consumer electronics industry especially in the current global financial meltdown.