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11/26/2008
01:24 PM
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Panasonic, Sanyo Far Apart On Acquisition Price

If combined, a Panasonic-Sanyo company would rival Japan's Hitachi, which has some $110 billion in annual sales.

Panasonic's effort to acquire Sanyo Electric broke off abruptly this week with the two sides far apart in the prices they were offering for a deal.

Sanyo shareholder Goldman Sachs walked out of negotiations, according to media reports from Tokyo.

The negotiations were followed by a wave of conflicting reports, but it was clear that Panasonic was offering far less than the Sanyo shareholders are willing to accept. Even so, an acquisition is expected to be accomplished at more than $8 billion and possibly much more, based on the reports that have swirled around the negotiations for months.

"We're no longer in talks with Panasonic on Sanyo," a Goldman Sachs spokeswoman told The Wall Street Journal. Goldman, along with Daiwa Securities SMBC and Sumitomo Mitsui Banking Co., reportedly controls about 70% of Sanyo.

If combined, a Panasonic-Sanyo company would rival Japan's current largest corporate behemoth, Hitachi, which has some $110 billion in annual sales. Particularly coveted by Panasonic for its advanced battery technology and its position in the vanguard of solar energy products, Sanyo would complement much of Panasonic's existing businesses.

While Sanyo has a long history of producing outstanding products, it began to suffer financially a few years ago and was forced to sell off some business units.

Earlier this year, Goldman pressured Sanyo's founding family to sell the company's interest in its mobile phone unit, and the deal was reported to have been carried out for a $375 million sales price to Kyocera. The acquisition catapulted Kyocera into the No. 4 mobile phone position in Japan.

Preliminary negotiations between Panasonic and Sanyo established that the strong Sanyo brand would live on in any acquisition.

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