Panasonic has secured a controlling stake in Sanyo, its Japanese rival, strengthening its position in the growing market for environmentally friendly technologies.
The deal hands Panasonic, the world's largest plasma TV manufacturer, a 50.2 per cent stake in Sanyo, the world's biggest maker of rechargeable batteries. Panasonic paid ¥403.8bn (£2.8bn) via a tender offer, which was widely expected to succeed as Sanyo's leading institutional shareholders, Goldman Sachs, Sumitomo Mitsui Banking Corp and Daiwa Securities, had agreed to sell their holdings. The transaction was delayed as Panasonic sought regulatory clearance from competition authorities around the world.
The move offers a lifeline to Sanyo, which was forced to raise billions of dollars in funds in 2006. The recent slump has also been hard to bear, with Sanyo, which has agreed to sell some its manufacturing operations to allay regulatory concerns, coming under pressure from the strength in the yen.
The company has been investing heavily in green technologies, selling hybrid batteries to customers such as Honda, Ford Motor Company and PSA Peugeot Citroën. The deal makes Panasonic, which runs a hybrid and electric car battery joint venture with Toyota, a dominant force in the hybrid battery market. Sanyo is also a major player in the solar cell market, offering Panasonic, which makes fuel cells, an opportunity to enhance its offering of alternative energy products.
Panasonic first revealed its interest in Sanyo in late 2008 as it sought to form an electronics heavyweight as the world economy slowed.
The company, which was sitting on ¥1.46 trillion of cash and cash equivalent at the end of September, has faced growing competition in the television market, battling with the likes of South Korea's Samsung.
Panasonic launched its tender offer in November. Sanyo's shares were trading at a premium to its ¥131 offer price, but, given the agreement of the three institutional shareholders, the deal proceeded as planned.
Goldman, Daiwa and Sumitomo had moved in three years ago when Sanyo issued ¥300bn preferred stock at ¥700 apiece. The three will book a hefty profit as each preferred stock can be exchanged for 10 common shares.