Panasonic goes green, plans to buy out units
By Taro Fuse |
July 30, 2010, Friday
|
Print Edition
Print Edition
JAPAN'S Panasonic Corp plans to buy out subsidiaries Sanyo Electric and Panasonic Electric Works for up to 818.4 billion yen (US$9.4 billion) to strengthen its push into greener businesses.
The world's No. 4 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 percent.
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.
Panasonic shares dived to its lowest since March 2009 after the buyouts was reported, on concerns the move would dilute existing shares. The fall wiped as much as US$3.5 billion off the company's market value.
Panasonic is struggling to boost profits in overseas markets as it battles tough price competition from South Korea's Samsung Electronics and LG Electronics.
Panasonic will launch an offer for the two subsidiaries from August 23 to October 6. The Osaka-based firm will pay 138 yen for each Sanyo share, 9.5 percent higher than the average price over the past three months, and 1,110 yen for each Panasonic Electric Works share, up 17.1 percent.
The world's No. 4 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 percent.
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.
Panasonic shares dived to its lowest since March 2009 after the buyouts was reported, on concerns the move would dilute existing shares. The fall wiped as much as US$3.5 billion off the company's market value.
Panasonic is struggling to boost profits in overseas markets as it battles tough price competition from South Korea's Samsung Electronics and LG Electronics.
Panasonic will launch an offer for the two subsidiaries from August 23 to October 6. The Osaka-based firm will pay 138 yen for each Sanyo share, 9.5 percent higher than the average price over the past three months, and 1,110 yen for each Panasonic Electric Works share, up 17.1 percent.
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