Panasonic today sealed Japan's biggest consumer electronics acquisition, striking a deal to take control of Sanyo after finally agreeing a purchase price with Goldman Sachs, a major Sanyo shareholder.
The deal follows weeks of rancorous negotiations with Goldman and will see Panasonic pay up to 800bn yen (£5bn) to get control of Sanyo and form one of the world's biggest electronics groups.
Goldman, which only weeks ago rebuffed Panasonic's initial offer of ¥120 a share, relented after suffering its first quarterly loss since going public in 1999. The Wall Street bank lost $2.29bn (£1.5bn) in its fourth quarter.
Panasonic will now pay ¥131 a share, just ¥1 more than its most recent offer, for preference shares held by Goldman, Sumitomo Mitsui Banking and Daiwa Securities SMBC. Panasonic will have a 70% stake in Sanyo, worth an estimated $6bn.
Although the two Japanese banks had reportedly endorsed the proposed takeover last month, the deal had to be put on hold while Goldman and Panasonic squabbled over Sanyo's valuation.
After more than a month of bartering, the parties were driven to agreement by the worsening global economic situation.
A Goldman spokeswoman said: "Given the rapidly changing environment, we came to the conclusion to sell our stake for the benefit of all Sanyo stakeholders."
Panasonic, known best for its flat-screen televisions and Blu-ray players, has long had designs on Sanyo, a leading maker of rechargeable batteries and solar panels.
Panasonic's president, Fumio Otsubo, said a tie-up with Sanyo offered his firm a way out of the deepening crisis. "The alliance with Sanyo will provide an engine for growth for us," he told reporters in Osaka, where the companies have their headquarters.
"We thought drastic action was necessary now as the environment surrounding the electric appliance industry is steadily worsening due to global competition and the worldwide recession."
Sanyo's president, Seiichiro Sano, agreed: "The alliance is opening up a way to fight these tough times."
The deal price is ¥10 more than Panasonic's original offer but still about ¥5 lower than its current market valuation.
That said, the ¥560bn represents a healthy return for Goldman, Sumitomo Mitsui and Daiwa, which paid ¥300bn when they came to Sanyo's rescue just two years ago.
Together they hold nearly 430m of Sanyo's preference shares, each of which can be exchanged for 10 ordinary shares when a restriction is lifted in March.
Analysts said Goldman had probably come to the realisation that, given the state of the world economy, it was unlikely to squeeze a higher offer out of Panasonic.
Panasonic and Sanyo have seen their profits dwindle as a result of weak demand and the yen's recent dramatic gains against the dollar and the euro.
Sanyo's profit for the July-September quarter fell by around two-thirds to ¥4.4bn, while Panasonic's quarterly profit plunged 16% to ¥55.5bn.
