Panasonic is offering 131 yen per share to take over Sanyo, whose solar cell and lithium-ion battery operations have made it an attractive acquisition target. Owning Sanyo would nearly quadruple Panasonic's share of the rechargeable battery market in the world, Bloomberg reported.
Strong demand from the computer laptop market has given Sanyo's lithium-ion battery business a big boost. Lithium-ion batteries have been emerging as a popular technology for powering electric cars. Sanyo is developing lithium-ion batteries for Volkswagen. It also sells nickel-metal-hydride batteries to Ford Motor Co. and Honda Motor Co.
Panasonic already is in the car battery business, having created a joint venture with Toyota Motor Corp. called Panasonic EV Energy. Toyota said it plans to start selling plug-in hybrid electric cars with lithium-ion batteries by 2010 (see Toyota Drives Toward Greener Fleet).
The Panasonic brand, in fact, will likely become far more familiar in green circles as the decade progresses. Like other consumer electronics makers, Panasonic is trying to reduce the power consumption in its TVs.
At the Ceatec tradeshow this year, Japan's equivalent of CES, every TV manufacturer showed off plans on how they were going to reduce the power consumption of large TVs down to the level of a couple of light bulbs. Many of these TVs will go on display a second time next month at CES.
The company also makes homes (through its construction division) and appliances in Japan. It will start to move into the European market in the next three years or so. In three to five years, the idea is to be able to pop out energy efficient homes in factories complete with devices that automatically turn down thermostats and lights as you move around the house.
"House to total solution, Panasonic is the only company to propose that," Ohtsubo Fumio, president of Panasonic, told Greentech Media in October.
It also is deploying, pretty much on a trial basis, hydrogen fuel cells for homes in Japan.
Panasonic and Sanyo overlap in their offerings of TVs, cameras and batteries. Panasonic makes a whole lot more products and is one of the world's largest consumer electronics makers.
Panasonic will gain a slice of the solar market by buying Sanyo, which is the seventh largest solar cell maker in the world. Sanyo recently announced ambitious plans to expand into the thin-film solar business by making amorphous silicon panels (see Sanyo Builds New Factory, Enters Thin-Film Fray).
Being part of Panasonic would give Sanyo access to more money to expand the capital-intensive solar business and fend off competitors such as Sharp. Sanyo hasn't fared well financially, and posted disappointing second-quarter earnings last month (see Sanyo Posts Losses, Panasonic Considers Buy).
Sharp began running a new thin-film solar production line in Japan in October and plans to launch its first product for the U.S. market next summer (see Sharp Guns for U.S. Thin-Film Market). The new production line brings the total thin-film solar production capacity to 160 megawatts per year, up from 15 megawatts per year. The company has vowed to grab more than 50 percent of the thin-film market by 2012.
News about the potential merger emerged in early November. After negotiating with Sanyo's major shareholders - Goldman Sachs, Sumitomo Mitsui and Daiwa Securities SMBC – Panasonic offered to buy Sanyo for 131 yen per share.
The three shareholders collectively own about 70 percent of the Osaka-based Sanyo. They rescued the troubled Sanyo in 2006. Sanyo had posted losses for four years in a row until the last fiscal year that ended in March 2008. Sanyo sold its mobile phone business to Kyocera earlier this year.
Panasonic and Sanyo share family ties. Toshio Iue founded Sanyo in 1947 after working for Matsushita Electric Industrial Co., which was founded by his brother-in-law Konosuke Matsushita. Matsushita Electric became Panasonic.
Panasonic expects to complete the acquisition by February next year.