Panasonic aims to acquire Sanyo with $9 billion tender offer in Japan electronics alliance a.. Yuri Kageyama, AP Business Writer TOKYO (AP) -- Panasonic has begun a 800 billion yen ($9 billion) takeover of Japanese rival Sanyo, hoping that transforming into one of the world's biggest electronics companies will help it weather the toughest business conditions in a century.
In this April 28, 2008 file photo, Fumio Ohtsubo, president of Matsushita
Electric Industrial Co., which was renamed on Oct. 1 to Panasonic Corp.,
attends a press conference in Tokyo, Japan. Panasonic will acquire rival
Japanese electronics maker Sanyo for up to 800 billion yen ($9 billion) through
a public tender offer after top shareholders, including Goldman Sachs, agreed
to the takeover, the companies said Friday Dec. 19, 2008. Panasonic President
Fumio Ohtsubo said that taking over Sanyo will provide an opportunity for his
company to become more competitive to ride out a worsening global downturn. (AP
Photo/Shizuo Kambayashi, FILE)
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Top shareholders, including Goldman Sachs, had been haggling over the price
with Panasonic Corp. since it expressed interest in Sanyo last month, but
Friday revealed they'd settled on a tender offer price of 131 yen ($1.47) a
share.
The deal would also allow Panasonic, which makes Viera TVs and Diga Blu-ray
disc players, to take advantage of struggling Sanyo's green businesses in solar
panels and rechargeable batteries.
Panasonic President Fumio Ohtsubo said that taking over Sanyo will provide an
opportunity for his company to become more competitive to ride out the
worsening global downturn.
"The alliance with Sanyo will provide an engine for growth for us," he said at
a news conference in Osaka, central Japan, shown via satellite in Tokyo.
Sanyo President Seiichiro Sano told reporters that the deal "is opening a way
to fight these tough times that come only once in a 100 years."
Sanyo, founded by a brother-in-law of Panasonic founder Konosuke Matsushita, is
a popular brand but has struggled to keep pace with bigger rivals in Japan's
competitive electronics sector.
Sanyo's July-September profit dwindled to about a third of what it was a year
earlier to 4.4 billion yen ($49 million) as a stronger Japanese currency,
rising raw material costs and declining gadget prices hurt earnings.
Panasonic's quarterly profit slumped 16 percent to 55.5 billion yen ($624
million).
Goldman, Daiwa Securities SMBC and Sumitomo Mitsui Banking Corp. together own
stocks and preferred shares equal to 4.3 billion common Sanyo shares or 70.5
percent of voting rights. Sanyo has about 6.1 billion outstanding shares in
total.
In 2006, Goldman, Daiwa, and Sumitomo Mitsui rescued struggling Sanyo with a
300 billion yen bailout. At the tender price, their part of the deal is valued
at more than 560 billion yen ($5.7 billion).
Kazumasa Kubota, analyst with Okasan Securities Co. in Tokyo, said Panasonic
was getting a good deal at the tender price.
The acquisition should eventually be a plus for Panasonic but shedding
overlapping businesses will add to short-term costs, he said.
"The synergies are there in the long run," Kubota said. "The solar business is
a definite positive for Panasonic, and it can also hope to gain all the patents
Sanyo has in rechargeable batteries."
Panasonic said in a joint statement with Sanyo that it will start the tender
offer soon for all shares of Sanyo, with hopes of completing the deal by
February.
New York-based Goldman Sachs said it agreed to the bid.
"Given the rapidly changing environment, we came to the conclusion to sell our
stake for the benefit of all Sanyo stake holders," Goldman Sachs spokeswoman
Hiroko Matsumoto said.
Although long the premier investment bank on Wall Street, even Goldman has been
hit by the markets turmoil set off by the U.S. financial crisis. Earlier this
month, Goldman Sachs Group Inc. reported its first quarterly loss since going
public in 1999, losing $2.29 billion during its fiscal fourth quarter.
Daiwa spokesman Kenichi Kanda said the company viewed the bid favorably,
welcoming the Panasonic-Sanyo alliance "as boosting the companies' value and
being positive for the Japanese economy."
Sumitomo Mitsui also said it was moving toward accepting it, evaluating the
planned alliance as a good one.
Sanyo shares dipped 3.6 percent to 136 yen ($1.50) while Panasonic shares
gained 2.9 percent 1,051 yen ($11.8). The companies announced the tender plans
shortly after trading ended in Tokyo.
Associated Press writers Shino Yuasa and Mari Yamaguchi contributed to this
report.
http://finance.yahoo.com/news/Panasonic-to-buy-Sanyo-in-9-apf-13876593.html
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