Panasonic To Buy Sanyo

Panasonic is in talks to acquire Sanyo in a deal that would create Japan's largest electronics group and spur consolidation of the fragmented sector.

A takeover would represent the first merger between two of Japan's big consumer electronics groups, creating a combined company with more than Y11,000bn (£69bn) in revenues. It is also expected to put pressure on rivals to strengthen their core businesses.

Panasonic, which is believed to have won the consent of Sanyo management for a takeover bid, is expected to start discussions shortly with Sanyo's main shareholders - Goldman Sachs, Sumitomo Mitsui Bank and Daiwa Securities, which together hold preference shares in Sanyo representing a stake of about 70 per cent.

Meanwhile, Panasonic's move comes as Fujitsu is poised to take control of Fujitsu Siemens Computer Holding, its joint venture with Siemens, by buying the German group's 50 per cent stake in their European personal computer business.

Fujitsu said discussions to take control of Europe's biggest PC maker, with an estimated value of €1bn (£800m), were making progress, although nothing had been decided.

The two moves reflect a shake-up of the Japanese electronics sector, which has seen a number of companies shed unprofitable businesses or join hands amid mounting competition from Korean and Taiwanese manufacturers.

Panasonic, which has reported a 4 per cent rise in first-half operating profit, would leapfrog Hitachi to become Japan's leading electronics group by revenue.

Sanyo's share price has slumped from a high this year of Y297 in May to Y145 at Friday's close.

The company said it was considering options but nothing had been decided. Panasonic declined to comment.

Story source: ft.com.