By Ucilia Wang
Sanyo Electric Co. (SANYY.PK) posted disappointing second-quarter earnings Wednesday amid talks about its sale to Panasonic Corp. (PC), which analysts say would benefit from Sanyo's solar cell and lithium-ion battery businesses.
Sanyo's net income fell 67 percent to reach 4.4 billion yen ($44 million) from the year-ago period. But strong demand for its batteries has prompted the electronics maker to project a 22 percent gain in the company's overall profit for the fiscal year ending in March 2009, reported the Associated Press.
In the first six months ending Sept. 30, sales from Sanyo's rechargeable battery business shot up to 205.1 billion yen, compared with 171 billion yen from a year ago. Sanyo sells different types of batteries including lithium-ion.
Battery sales contributed 12 percent of the company's revenue in the last fiscal year, making it the largest business segment in Sanyo. The company is the world's largest lithium-ion battery maker.
Speculation about Panasonic's interest in buying a majority stake in Sanyo began last weekend, when the Japanese media reported that Panasonic and Sanyo had reached a preliminary agreement on the sale. Panasonic plans to make a formal offer to Sanyo soon to Goldman Sachs, Sumitomo Mitsui and Daiwa Securities SMBC, which collectively own about 70 percent of Sanyo.
Solar cell and lithium-ion battery operations make Sanyo an attractive acquisition target. The company is the seventh largest solar cell maker in the world and recently announced ambitious plans to expand into the thin-film solar business by making amorphous silicon panels (see Sanyo Builds New Factory, Enters Thin-Film Fray).
Panasonic, the world's largest consumer electronics maker, will gain a slice of the solar market by acquiring Sanyo, which also makes TVs, cameras, home appliances and semiconductors.
Support from Panasonic could sharpen Sanyo's competitive edge as it competes with other
