Panasonic officially acquired Sanyo in an effort to help both companies make it through the global economic slump that has hit the Japanese tech market exceptionally hard.
The acquisition will lead to Japan's largest electronics company and the second largest electronics firm in the world. A public sales figure was not disclosed, but unconfirmed reports have the deal valued in the neighborhood of $8.77 billion, at least one analyst said.
Japanese sources announced both companies reached a tentative agreement last month, with executives from both companies agreeing the deal made sense. Japanese electronics makers have struggled due to increased competition from Korean and Chinese tech companies, along with economic troubles.
Sanyo's most recent quarter saw a whopping 67 percent profit drop due to a rise in cost of raw materials and declining product prices. The company looked for a merger so it could continue to expand production, while Panasonic wants to better prepare itself for turbulent economic times.
Panasonic will now be better suited to tackle the growing rechargeable and solar battery markets, which are expected to grow in the coming years. Specifically, the increased demand for hybrid and electric vehicles could help Panasonic rake in revenue from Sanyo's strong reputation for batteries.
Sanyo currently manufacturers car batteries for Volkswagen and Ford, with Panasonic supplying batteries to Toyota.
In addition to batteries, Panasonic will also focus on solar panels and solar cells, which also has seen a global rise in demand.
Both companies will work together to work in the car electronics sector, both inside Japan and in the United States and Europe, they announced during a press conference.
It's likely there will be some product overlap, but Panasonic aims to utilize a larger product catalog to attract new consumers who may be hesitant about spending money on consumer electronics right now.
