Panasonic set to buy rival Sanyo

Japanese electronics group Panasonic has offered to buy rival Sanyo for 806.7bn yen ($9bn; £6bn).

The two firms said in a joint statement they had to take "drastic action" to boost revenue growth.

Panasonic, a leading flat TV maker, is offering 131 yen per Sanyo share, and major shareholders, including Goldman Sachs, have agreed to sell up.

Panasonic is interested in Sanyo's green energy businesses, such as solar panels and batteries.

It said in a statement it "will consider various options including a possible investment of around 100bn yen in order to achieve the synergy of both companies".

Goldman Sachs initially rejected Panasonic's lower offers.

But the investment bank decided to tender its Sanyo stake to Panasonic after reporting its first quarterly loss since going public.

Recent problems

Sanyo has been facing problems in recent years, cutting thousands of jobs and selling unprofitable operations.

Recently it has been hit by a stronger yen, rising material costs and falling gadget prices.

The same factors also contributed to a drop in Panasonic profit, as the company cut its annual profit forecast by 90% because of the global economic downturn.

But Panasonic is less dependent on exports to the US than Sanyo, a factor which has helped it do better than some other rivals in Japan.

Analyst Kazumasa Kubotaat Okasan Securities said that despite the high cost, "in the longer term the acquisition is absolutely an advantage for Panasonic".

The two companies have historical ties, with their founders being brothers-in-law.