Green Moves Lie At Heart of Panasonic's Buy Out of Sanyo

Panasonic Corp. (s PC) plans to spend up to 818.4 billion yen, or about $9.5 billion, buying out two of its subsidiaries in an effort to go greener, faster. The Japanese electronics giant, which currently owns a little more than half of Sanyo and Panasonic Electric Works, announced in Osaka, Japan on Thursday that it aims to take 100 percent control of the companies.

Sanyo leads the rechargeable lithium-ion battery market and has more than three decades of experience building solar photovoltaic products, while Panasonic Electric Works makes components for advanced buildings and LED lighting.

Already Toyota’s joint venture partner for hybrid battery production, Panasonic has shown it’s serious about trying to grab a foothold in the green energy market. In late 2008 the consumer electronics giant announced plans to buy a majority stake in Sanyo. The deal closed last December, leaving Panasonic poised to have more bargaining power with electric car makers and be at the leading edge of an industry shakeup, analysts told Bloomberg, in which “the auto and electronics industries fuse.”

A year later the company said it would invest $1 billion by 2012 in clean technologies as part of a plan to focus its core business on outfitting homes and commercial buildings with solar power and energy-saving products. And by January 2010, when Panasonic and Tesla Motors (s TSLA) announced plans to develop battery cells for electric vehicles, Panasonic said it had reached about the halfway point in what it expects to be a $1 billion investment over three years in facilities for lithium-ion cell research, development and production.

But Panasonic appears to be scrambling. As James Simms writes over at the Wall Street Journal: “Although it already holds majority stakes in both companies, it apparently can’t make the changes it needs at either.”

Panasonic President Fumio Ohtsubo (one of our Top 15 Connected Car Influencers) explained in a statement today that the rapid expansion of “environment-related and energy-related markets and the burgeoning emerging markets,” presents somewhat of a double-edged sword for the company. Businesses opportunities are presenting themselves as a result of these changes, said Ohtsubo. Yet at the same time “competition with Korean, Taiwanese and Chinese companies as well as Japanese, U.S. and European companies, etc. has intensified not only in the Digital AVC Networks segment, but also in the fields of rechargeable battery, solar cell and electric vehicle-related business.”

To keep up, Ohtsubo suggested there’s really no choice but to streamline and bring subsidiaries that have been relatively independent into the corporate fold. “It has become difficult for companies to prevail over the global competition in the expanding market,” he said, “without speeding up the strategy execution and implementing all measures to demonstrate further group-wide potential.”

Panasonic plans to buy the remaining shares in Sanyo and Panasonic Electric Works through a tender offer beginning August 23 and ending October 6.

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