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Friday, December 19, 2008
 Panasonic and Sanyo Finally Agree to Capital and Business Alliance
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Message Text: Panasonic and Sanyo Electric,<

Panasonic said that it would aim to acquire the majority of the voting rights (72%) of Sanyo assuming full dilution (which takes into account conversion of Class A preferred stock and Class B preferred stock into common stock) by means of a public tender offer bid.

The companies will form a close alliance in business with the prospect of organizational restructurings of both companies.

Panasonic said that it would commence the tender offer subject to, among other conditions, completion of the procedures and the measures that were necessary under domestic and overseas competition laws and regulations. The offer values Sony at $9.1 billion.

The company expects to complete the procedures by the end of February 2009.

"By combining the accumulated technologies and manufacturing knowledge of both companies, Panasonic and Sanyo believe that together they will evolve into a corporate group which will be highly admired globally by enhancing the quality of life for the people worldwide and becoming a business entity coexisting in harmony with the global environment," the companies said in a statement.

Panasonic and Sanyo believe that, through this alliance, a strong collaboration between both companies will be established in a wide range of business fields. The primary synergy effects that are currently expected are as follows:

Solar Business
By utilizing the business platform of Panasonic, the companies aim to respond to the demand for solar batteries for which significant future growth is expected, through (i) further expanding business in the area of highly efficient HIT (crystalline silicon) solar photovoltaic cells and modules (batteries) and (ii) acceleration of development and commercialization of next-generation solar cells. In addition, by utilizing the domestic and overseas sales platforms of the Panasonic Group, a significant increase in sales can be expected.

Rechargeable Battery Business (Mobile Energy)
Sanyo has established its status as a leading company in the rechargeable battery business focused on lithium-ion rechargeable batteries. In addition, Panasonic has utilized its original black box technology and expanded its business globally. By making this alliance, the companies will further strengthen both of their competitiveness through, among others, (i) the introduction of Sanyo?s production technology to Panasonic and (ii) the provision of Panasonic?s high-capacity technology to Sanyo.

Active investments will be also made in batteries for HEV (Hybrid Electric Vehicle) and EV (Electric Vehicle), for which future rapid market growth is expected, and together as the Panasonic Group, it is believed that collaboration with automakers can be strengthened and sales significantly expanded.

Strengthening Financial and Business Position
By Sanyo becoming a member of the Panasonic Group, reductions in company-wide procurement costs in areas such as materials purchasing or reductions in logistics-related costs are expected in Sanyo.

Also, in accordance with the alliance agreement reached today, Panasonic and Sanyo will set up a "Collaboration Committee," and the said committee shall consider, to the extent permitted under the applicable laws and regulations, various items, such as management systems, technology development, procurement, logistics, quality control and IT infrastructure, in order to achieve the outcomes of collaboration between the two companies as soon as possible after making Santo a subsidiary of Panasonic.

In addition, Panasonic will consider various options including a possible investment of around 100 billion yen in order to achieve the synergy of both companies.

Panasonic will commence a tender offer bid for the purchase of all shares of Sanyo (including all of common stock, Class A preferred stock and Class B preferred stock), subject to, among other conditions, completion of the procedures and measures that are necessary under applicable domestic and overseas competition laws and regulations. Upon the Tender Offer, the purchase price will be 131 yen per share of common stock, 1,310 yen per share of Class A preferred stock and 1,310 yen per share of Class B preferred stock.

Panasonic said that it had received an opinion from Merrill Lynch Japan Securities Co., Ltd. that, under certain assumptions, those purchase prices were fair from a financial point of view to Panasonic.

Oceans Holdings Co., Ltd. (an affiliate company of Goldman Sachs Group, Inc.), Evolution Investments Co., Ltd. (a wholly-owned subsidiary of Daiwa Securities SMBC Principal Investments Co., Ltd.) and Sumitomo Mitsui Banking Corporation, which are the major shareholders of Sanyo, are positively considering the sale of Sanyo shares in the Tender Offer.

The companies also have agreed that Sanyo should maintain the listing of its common stock on the stock exchanges after consummation of the Tender Offer, and in the event that the results of the Tender Offer may possibly lead to the violation of the listing requirements, both companies shall consult each other to deliberate on the measures to be taken in order to avoid delisting of Sanyo common stock.
 
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