July 2, 2010 / 8:47 AM / in 7 years

UPDATE 1-Sanyo finalising chip unit sale to ON Semi-sources

TOKYO, July 2 (Reuters) - Japan’s Sanyo Electric 6764.T is close to finalising the sale of its semiconductor business to U.S.-based ON Semiconductor ONNN.O, three sources told Reuters on Friday.

ON Semiconductor will pay between 20-30 billion yen ($228 million-$342 million) for the unit, Kyodo news agency said.

Sanyo, majority owned by Panasonic Corp (6752.T), aims to reach an agreement with the firm, based in Phoenix, Arizona, by the middle of this month, the sources said.

Sanyo is looking to sell the loss-making unit to focus on fast-growing businesses such as rechargeable batteries. The semiconductor business made a 7.1 billion yen loss in the year to March 2010, pushing Sanyo into a loss for the year.

ON Semiconductor, which had revenues of $1.8 billion in 2009, was spun off from Motorola Inc MOT.N in 1999.

It competes with Texas Instruments Inc TXN.N, Intersil Corp ISIL.O and Fairchild Semiconductor International Inc FCS.N and acquired California Micro Devices for $113 million in cash in January.

Sanyo’s shares closed up 1.79 percent at 114 yen on Friday, ahead of the news. (Reporting by Kentaro Hamada, Taro Fuse and Isabel Reynolds; Editing by Edwina Gibbs)

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