By Balachander Suriyanarayanan: Subscribe to Balachander's RSS feed
July 29, 2010 10:58 AM EDT
Japan's Panasonic Corp. said it will offer up to 818.4 billion yen ($9.4 billion) to buy out two of its subsidiaries, Sanyo Electric and Panasonic Electric Works, in a move to strengthen its green energy business.
The electronic giant said it may raise up to 500 billion yen in new share offerings to fund the purchases. "Any external financing will be carefully considered based on the actual purchase amount for the tender offers," it said in a statement on Thursday.
Osaka-based Panasonic will pay 138 yen per Sanyo Electric share and 1,110 yen per Panasonic Electric Works share. The tender offer for the shares it doesn't own in the two majority-held units will take place between August 23 and October 6, the company said.
The company bought a 50.05 percent stake in Sanyo, the world's largest maker of rechargeable lithium ion batteries and solar panels, last year. It owns 51 percent of Panasonic Electric Works, which makes lighting systems and electrical wiring fittings.
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Panasonic said the acquisitions are part of its vision of becoming the "No. 1 green innovation company in the electronics industry."
"While business expansion opportunities have been provided by the expanding environment- and energy-related markets and rapidly growing emerging markets, competition Korean, Taiwanese and Chinese companies as well as Japanese, U.S. and European companies has intensified," Panasonic said.
The company is facing tough competition not only from local rivals like Sony Corp. but also from South Korea's Samsung Electronics and LG Electronics in consumer electronics.
The new Panasonic Group, under which the three companies will be integrated, will make efforts “to realize speedy and lean management.”
Through the acquisition, Panasonic will absorb Sanyo’s strength in solar and rechargeable batteries business and Panasonic Electric Works’ strength in home electrical appliance and construction materials operations.
The Panasonic Group’s business organization is scheduled to be restructured by around January 2012 into three business sectors: “Consumer,” “Components and Devices” and “Solutions”.
Panasonic had in May announced its three-year midterm management plan called “Green Transformation 2012” (GT12) to accelerate the development of solar cells and energy management services. Panasonic aims to generate sales of 850 billion yen from its energy systems business for the fiscal year ending March 2013, the last year of GT12.
In a separate statement on Thursday, Panasonic said to swung to a profit of 43.7 billion yen for the first quarter to June from a net loss of 52.98 billion yen a year earlier and it raised its full-year net profit forecast to 85.00 billion yen from its prior expectations of 50.00 billion yen.
Panasonic Corp. fell 7.7 percent to 1,077 yen in Tokyo trading, while Sanyo’s shares ended the session 26.27 percent higher at 149 yen. Shares of Panasonic Electric Works closed 15.4 percent higher at 1,124 yen. The benchmark Nikkei average .N225 fell 0.6 percent to 9,696.02.
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