Panasonic and Sanyo have reached a preliminary agreement for Panasonic to acquire fledgling Sanyo for an undisclosed sum, according to a media report published by the Kyodo News Agency.
The two companies secretly came to agreement last month, according to Japanese sources, without naming who first disclosed the news. The opportunistic move is well timed as Sanyo's stock has lost one third its value since September.
Sanyo's top shareholders includes Daiwa Securities SMBC group, Sumitomo Mitsui Banking Corp., and the Goldman Sachs group -- which collectively have 430 million shares of Sanyo.
The takeover would force other companies to clean up their act in an electronics sector that has become increasingly fragmented over the past several years, because of increased competition from American, Chinese and Korean technology companies. The electronics industry has been turbulent because of lower priced competition, which has forced several companies to sell unprofitable business departments or merge so they can be better suited to compete.
Panasonic and Sanyo representatives are expected to host a joint press conference on Nov. 7, where more specific details of the buyout will be released to the media.
Both companies reportedly hope to close out the deal within six months.
Once the deal is completed, Panasonic would overtake Hitachi as the leading electronics company in Japan. Panasonic already is the alrgest plasma TV maker in the world, leading Samsung and company, who are preparing for a busy end to 2008 and chaotic 2009.
In the future, Sanyo under the Panasonic wing would give the Japanese company a better grasp of the rechargeable battery market -- although it may sound irrelevant, rechargeable batteries are increasing in importance due to electronic devices and hybrid cars that use rechargeable batteries.
