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2008年11月11日 (火)


2008/11/11--The Asahi Shimbun, Nov. 8(IHT/Asahi: November 11,2008)

EDITORIAL: Panasonic-Sanyo deal


Panasonic Corp. and struggling Sanyo Electric Co. announced Friday they will enter into capital and business tie-up talks that would bring the two domestic electronics makers under the same corporate roof. This strategic move, the first such postwar deal in the electronics industry, is intended to help the companies weather the current harsh economic climate.


What is most notable about Panasonic's acquisition of Sanyo is that it represents a response to the biggest challenge facing mankind: stemming global warming.


Sanyo virtually pioneered the development of solar batteries. It now ranks seventh in the world in terms of production with a 4.4-percent global market share. Panasonic has pulled out of this area. But solar batteries are attracting growing attention as a promising energy source for the post-oil era. The world market is expected to grow rapidly in coming years. Panasonic plans to invest heavily to accelerate development of new solar-battery technologies.


Sanyo is also the world's top maker of rechargeable lithium-ion batteries with a global market share of nearly 40 percent. Sanyo and Panasonic combined control about half of the world's market. In addition to products for cellphones and other portable equipment, Sanyo is now developing lithium-ion batteries for automobiles. A combination of Sanyo's lithium-ion battery technology and Panasonic's fuel cell expertise could offer highly eco-friendly car engines in the future. Clearly, Panasonic's acquisition of Sanyo makes good strategic sense, taking into account moves by automakers to develop cleaner cars.



Cutting-edge battery technologies are considered crucial for the growth of several key next-generation industries. And they will create a spillover effect on a wide range of other industries. Panasonic's move is likely to give a big jolt to its competitors.


Sanyo's three leading shareholders--Sumitomo Mitsui Banking Corp., Daiwa Securities SMBC Co. and Goldman Sachs Group Inc.--played a key role in engineering the deal.


These three financial institutions provided 300 billion yen of fresh capital to support a turnaround of Sanyo, which is highly competitive on several fronts but fell into trouble due to poor management. The three shareholders first put pressure on Sanyo to discard its diversification-oriented strategy and sell off unprofitable businesses to focus on strategically important areas like the solar-battery business. Then, they sought out a partner that can make good strategic use of Sanyo's competitive technologies and arranged a marriage between the two companies.


 Investment banks, the epicenter of the financial earthquake that has rocked the world, are now under fire. But their primary role as behind-the-scenes promoters of industry consolidation will become increasingly important in this era of great changes in the global industrial landscape. The way the Panasonic-Sanyo deal has been sealed offers a good example of how investment banks can play a positive role for changes demanded by the times. Financial institutions now need to engage in serious soul-searching about how they got absorbed in playing money games that had no connection to the real economy.


Another noteworthy fact about the acquisition is that it directly benefits from the current financial crisis, which is generating considerable headwind for domestic industries. While the steep decline of stock prices in recent weeks has had a negative effect on the overall economy, it has also created new opportunities for moves toward industry consolidation by lowering the costs of buying companies. If Panasonic's strategic acquisition model, which takes advantage of the current crisis, is followed by other companies, it could help get the economy back on track.


However, there is no guarantee that Panasonic will be able to transform Sanyo without cutting jobs at Sanyo. This will be a tough challenge since Sanyo still has many money-losing operations. We hope Panasonic will do its utmost to minimize job losses.


Many Japanese electronics companies remain wedded to the old-fashioned business model of "comprehensive manufacturing" operating in a wide range of areas. As the industry consolidates further, companies need to pursue a strategy to concentrate on selected areas to develop next-generation products and technologies that make them truly competitive.



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