Panasonic-Sanyo:the details of the transaction

 
November 10, 2008, 7:16 am

 
panasonic-sanyo:the details of the transaction   Panasonic Corp. officially announced the purchase of its rival Sanyo Electric Co. This will create the largest electronics manufacturer in Japan and is a prerequisite to further consolidate the industry, affected by declining consumer demand. The deal, which analysts estimate at $ 8, 8 billion, will enhance the competitiveness of Panasonic batteries in the sector and means to develop solar energy, responding to the growing industry of green energy sources.
Panasonic after some time will be the second largest conglomerate in the world after General Electric, ahead of Hitachi Ltd. in the status of the largest electronics manufacturer in Japan. However, the takeover carries certain risks, so Panasonic has not yet announced its plans for unprofitable units Sanyo, such as home appliances and microchips.
Strategically it makes sense, though Panasonic is not composed entirely Sanyo Electric - said Hanna Kanliff (Hannah Cunliffe), the stock manager Union Investment and shareholder Panasonic. There should be a fairly aggressive restructuring.
Panasonic, a world leader in plasma TVs, seeks to take control of the company Sanyo because of its high position in the market batteries that are widely used in mobile phones, PCs, portable media players and are increasingly used as a source of traction force car.
Sanyo delivers Nickel-Metal Hydride batteries for Ford Motor Co. and Honda Motor Co. Ltd. and developing a lithium-ion units for cars jointly with Volkswagen AG, while Panasonic launches joint venture to produce batteries with Toyota Motor Corp. In addition, this transaction will allow Panasonic to enter the market for solar energy. Sanyo is the seventh largest producer of solar cells in the world after Q-Cells, Sharp Corp. and Suntech Power Holdings Co. Ltd.
Difficult business conditions make it difficult achieve planned growth - Panasonic said President Fumio Otsubo (Fumio Ohtsubo). We need new engines of growth within our group.
Panasonic was founded 90 years ago, Konosuke Matsushita (Konosuke Matsushita). Sanyo was founded shortly after World War II brother`s wife Matsushita Toshio Iu (Toshio Iue). But history does not guarantee that they will receive from the profits in the merger, and Panasonic are not overpaid against the backdrop of economic recession and the collapse in demand for cars. For example, Toyota shocked its investors on Thursday, warning that its earnings will fall to 13-year minimum. In addition, the fall in oil prices makes the prospects for solar energy more vague.
The weak state of automakers and lower prices for crude oil may suspend the development of environment-friendly cars and the widespread introduction of solar panels - said fund managers Mizuho Asset Management Yoshihisa Okamoto (Yoshihisa Okamoto).
In order to get control of Sanyo Panasonic vykupit its share at Daiwa Securities SMBC, Sumitomo Mitsui Banking Co. and Goldman Sachs, have assisted the company in 2006. These three banks owned 430 million preferred shares, each of which can be exchanged for 10 ordinary after the lifting of restrictions. This corresponds to 70% of the shares. Credit Suisse analyst Koya Tabata (Koya Tabata) previously stated that Panasonic can offer up to 140 yen per share Sanyo, appreciating the company $ 8, 8 billion, which is 40% above the market price. Price talks would depend on the restructuring of the company.
The deal, causing shares rally Panasonic and Sanyo last week, could trigger a new round of consolidation in the sector. This shows that in Japan too many companies producing electronics, and if the trend will be supported, it will have a positive impact on the market - said Soichiro Mondzhi (Soichiro Monji), a senior strategist Daiwa SB Investments.
Before the official announcement of the merger shares Panasonic closed a decline of 3, 8% and Sanyo dropped on 0 and 5%. Nikkei Index fell by 3, 6%.

 

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