Panasonic to buy Sanyo, other unit for $9.4 billion

Written by Reuters | Tokyo | Updated: Jul 31 2010, 04:11am hrs
Japans Panasonic plans to buy out subsidiaries Sanyo Electric and Panasonic Electric Works for up to 818.4 billion yen ($9.4 billion) to strengthen its push into greener businesses.

The worlds fourth-largest flat TV maker will raise up to 500 billion yen in a new share issue to help finance the buyouts, sending its shares down as much as 11%. Under president Fumio Ohtsubo, Panasonic has been shifting away from low-margin home electronics products and investing more aggressively in solar cells, batteries and other energy-related areas which offer promising growth prospects.The cost may not be small, but I think investors will welcome the deal as Panasonic can boost its rapidly growing environment-related business, said Okasan Securities analyst Kazumasa Kubota. With only its audio and visual business the firm could not expect to grow dramatically. Panasonic shares dived to its lowest since March 2009 after reports of the buyouts, on concerns the move would dilute existing shares. The fall wiped $3.5 billion off the companys market value.