TOKYO (Reuters) - China’s Haier (1169.HK) will buy Panasonic Corp’s (6752.T) Sanyo Electric washing machine and refrigerator units in Japan and Southeast Asia for about $130 million, in a move that will give the Chinese appliance giant better access to the world’s third-largest economy, sources said.
Panasonic said on Thursday the two companies have agreed with the transaction, but did not disclose the financial terms.
The sale fits in with Panasonic’s strategy to restructure businesses that overlapped with those of Sanyo Electric, the Japanese electronics maker said.
Haier, which outbid at least one rival eyeing Sanyo’s energy-efficient refrigeration technology with the 10 billion yen deal, has been seeking to expand in Japan’s tough white goods market, four sources familiar with the matter said.
Haier, which partnered with Sanyo in 2002 to gain a toehold in Japan, has taken a share of over 50 percent in the market for small refrigerators, and has been preparing to compete with Japanese makers head-on in mainstream washers, air conditioners and refrigerators with lower prices, one source said.
“Japanese makers have an overwhelming market share in Japan only because this is Japan,” said one source involved in a competing bid.
“If Haier can produce a lineup of low-cost and energy-efficient appliances here, it could be a real threat to Japanese manufacturers.”
Haier’s purchase is the latest in a flurry of deals by Chinese firms seeking an entry into Japan.
In May, Chinese textile group Shandong Ruji became the biggest shareholder in Japanese apparel maker Renown Inc, while Chinese automaker BYD Co (1211.HK) acquired a factory from Japanese metal die maker Ogihara Corp in March.
The Haier deal is likely to be followed by similar sales, as Panasonic puts more operations on the block following its acquisition of Sanyo, the sources said.
Panasonic could be looking to streamline its semiconductor, battery and TV businesses, Goldman Sachs analyst Takashi Watanabe said.
Panasonic will sell Sanyo’s holdings in about 10 units and affiliates that handle development, manufacturing and sales, the sources said.
The units to be sold generate annual revenue of roughly 80 billion yen ($1 billion), one source said.
Panasonic and Haier are expected to reach the final agreement by September, Panasonic said. Most of the businesses’ about 2,000 employees will be transferred to Haier, sources have told Reuters.
Panasonic will sell Sanyo’s washing machine unit Sanyo Aqua and all the shares owned by Sanyo in Konan Denki, a maker of washing machines, to Haier, Panasonic said.
The transaction would also include sales of Sanyo’s shares in refrigerator makers Haier Sanyo Electric and Haier Electric Thailand, to Haier, it said.
A Vietnam-based maker and distributor of refrigerators and washing machines, as well as other units in Indonesia, Philippines and Malaysia will also be sold to Haier.
Panasonic's shares edged up 0.54 percent at 929 yen, compared with a 1.45 percent fall in the benchmark Nikkei average .N225. ($1 = 77.965 Japanese Yen)
Additional reporting by Mayumi Negishi, Mariko Katsumura in Tokyo and Meenakshi Iyer in Bangalore; Editing by Vinu Pilakkott