Panasonic Corp. is in talks to buyout smaller Japanese rival Sanyo Electric Co. in a deal that would create one of the world’s largest electronics empires. The merger would bring together well-known brands, with combined sales of more than $111.5 billion. The companies are expecting to complete a deal by the end of the year.
“Panasonic and Sanyo will start discussions with the aim of maximizing both companies’ corporate values by pursuing synergies between both companies,” the companies released in a statement.
Panasonic did not say how much it planned to offer for each Sanyo share. Koya Tabata, an analyst at Credit Suisse, estimated earlier this week that Panasonic could offer as much as $1.43 for each Sanyo share, according to Reuters.
Sanyo’s biggest stakeholders, Goldman Sachs Group Inc. of the United States and Japanese banks Sumitomo Mitsui Banking Corp. and Daiwa Securities SMBC, have invested $3 billion in Sanyo in 2006, and hold about a combined 70-percent stake in the electronics firm.
Adding Sanyo as a subsidiary to Panasonic would create Japan’s biggest electronics maker, surpassing Hitachi Ltd., and become one of the world’s largest electronics companies.
The companies said they hope to reduce production and development costs through working together on technology and joint procurement.
