Panasonic will acquire rival Japanese electronics maker Sanyo for up to $9 billion (800 billion yen) through a public tender offer after top shareholders, including Goldman Sachs, agreed to the takeover, the companies said Friday.
The deal would create one of the world’s biggest electronics companies and allow Panasonic Corp. to add Sanyo Electric Co.’s strengths in green energy — solar panels and rechargeable batteries — to its sprawling product lineup.
Panasonic, which makes Viera TVs and Diga Blu-ray disc players, said last month it was interested in acquiring Sanyo. Sanyo, which has been struggling to turn around its business, also expressed interest in the alliance.
Kazumasa Kubota, analyst with Okasan Securities Co. in Tokyo, said Panasonic was getting a good deal at the tender price of 131 yen ($1.47) a share.
The acquisition should be a plus for Panasonic in the long run, 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 had been negotiating with Sanyo’s top three shareholders, Goldman Sachs, Daiwa Securities SMBC and Sumitomo Mitsui Banking Corp., who had all put up some resistance to selling their stakes.
Goldman, Daiwa and Sumitomo Mitsui together own Sanyo stocks equal to a combined 70.5 percent of voting rights, or preferred shares that can be converted into common stock of about 4.3 billion shares, the statement said. When all outstanding Sanyo shares are combined, they total about 6.1 billion.
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 it went 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, founded by a brother-in-law of Panasonic founder Konosuke Matsushita, is a popular brand but has been seen as a relative loser in Japan’s competitive electronics sector.
In 2006, Goldman, Daiwa, and Sumitomo Mitsui rescued struggling Sanyo with a 300 billion yen bailout.
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.