Panasonic is moving to acquire Sanyo Electric after squabbling Sanyo shareholders agreed to a plan whereby the smaller electronics company will be acquired for around $9 billion.
U.S. investment powerhouse Goldman Sachs threw in the towel and modified its earlier entrenched position, agreeing to participate in the deal for a price per share of 131 yen ($1.47) after it had rejected an earlier price of 130 yen. The 131-yen price is still 4% lower than the recent trading price of Sanyo stock. According to media reports in Japan, the participants feared the global economic meltdown could get worse and block consummation of the deal.
"Some people may wonder why we join hands with Sanyo when the economic outlook is this cloudy," said Panasonic president Fumio Ohtsubo at a news conference Friday. "I believe we need to take bold steps for growth in the time of drastic changes like this while strengthening our business operations."
Sanyo has pioneered the development of lithium-ion batteries, and its operations in the field could complement Panasonic's battery operation, which has a program with Toyota. Sanyo is the world's largest producer of rechargeable batteries and also has a sizable solar-panel business.
Other Sanyo shareholders Sumitomo Mitsui Banking and Daiwa Securities SMBC are expected to participate in the Panasonic buyout, which is targeted for completion in February.
Earlier this year, the same investor trio pressured Sanyo to sell its mobile phone operation to Kyocera for $375 million. Sanyo mobile phones, which were generally well-received by consumers, enabled Kyocera to strengthen its CDMA handset program.