Panasonic today began its long-awaited bid to take over rival Sanyo in a deal that is set to form one of the world's biggest electronics makers.
Panasonic, the world's biggest maker of plasma TVs, is offering ¥402bn (£2.7bn) to secure a majority stake in Sanyo and take advantage of its expertise in rapidly expanding "green" businesses such as solar panels and rechargeable batteries.
Sanyo is the leading global supplier of rechargeable batteries for laptops, camera and other gadgets and its clients in the car industry include Honda, Ford and Peugeot Citroen.
Panasonic, meanwhile, is jointly developing batteries for hybrid and electric cars with Toyota.
By combining their prowess in solar and fuel cells, the Panasonic-Sanyo alliance is expected to tap into the growing market for green energy storage and production.
Panasonic said the tender offer would last until 7 December at the price of ¥131 per share, nearly half Sanyo's current share price.
Sanyo shares plummeted more than 20% to ¥172 in Tokyo today, a day after Panasonic formally announced the tender.
The bid is expected to be successful because Sanyo's three major shareholders – Goldman Sachs, Daiwa Securities SMBC and Sumitomo Mitsui Banking – have already agreed to sell their combined shares at the offered price.
In 2006 Sanyo was forced to issue ¥300bn in preferred shares, each of which can be exchanged for 10 common shares, to the three financial institutions at ¥700 a share to help it restructure after a sharp downturn in earnings.
The proposed takeover would give Panasonic a 70% stake in Sanyo, although it is unlikely to realise its aim of a 100% stake, as other smaller shareholders may not be tempted to sell their shares at a vastly reduced price.
Panasonic has had to wait almost a year while anti-monopoly authorities in China and the EU examined the bid. The US's anti-trust watchdog is expected to give its approval soon.
Sanyo has struggled to perform in Japan's highly competitive electronics sector, although part of the blame lies with a 2004 earthquake that crippled its main chip plant – a key factor in the subsequent rescue bid by Goldman and the Japanese banks.
In 2007 an accounting scandal forced the Osaka-based firm to appoint its first president from outside the company's founding family.
Panasonic crept back into profit in the second quarter of this year – its first profit for a year – but still forecast full-year losses of ¥140bn.
