teotwawki arrived early for the japanese :0)
just in in-tray, per ft ft.com , about how one japanese company taking over another japanese company must toe the law of beijing - irony so rich it be magnetic, and presumably, once done and in dire need of rare earths, must obey more regulations
China puts curbs on Panasonic Sanyo deal
By Robin Harding and Sundeep Tucker
Published: November 4 2009 19:39 | Last updated: November 4 2009 19:39
China is forcing Panasonic to sell off assets in Japan to secure approval for its acquisition of Sanyo Electric, the first time Chinese competition authorities have compelled disposals outside of the country in a monopoly review.
The landmark ruling by China’s commerce ministry clears the way for Panasonic to press ahead with its long-delayed Y805bn ($9.4bn) tender offer to acquire Sanyo Electric, another Japanese company, and create a global battery power house.
The ruling, based on Chinese anti-trust laws introduced in August, 2008, underlines the growing power of Beijing’s competition authorities and the rising sway its huge market is giving it in global regulation.
Competition law experts said that the Chinese demands went further than those of the European Union, which last month cleared the takeover subject to fewer divestments, and would make international companies take even greater notice of China in weighing up mergers and acquisitions.
Natalie Yeung, a competition lawyer in the China practice of Slaughter and May, described the Panasonic judgment as Mofcom’s “most detailed and comprehensive to date under the new laws”.
The commerce ministry ruled that, without divestments, the combined new Sanyo and Panasonic company would have a 77 per cent share of the Chinese market in hybrid vehicle batteries, a key product in the rapidly expanding green energy sector.
The ministry also demanded the sale of factories that produce other products after ruling that the combined company would have a 62 per cent local market share in lithium coin batteries and 46 per cent in ordinary nickel-metal hydride (Ni-MH) batteries.
China demanded that Panasonic sell its division that makes Ni-MH batteries for hybrid electric vehicles and reduce its stake in a Ni-MH battery joint venture with Toyota from 40 per cent to 19.5 per cent.
Despite the competition clearance, received almost a year after Sanyo originally agreed to the takeover, the deal still poses tricky questions for Panasonic.
One is that Sanyo’s stock trades at levels well above the Y131 a share at which Sanyo’s controlling investors agreed to sell to Panasonic last December. Other holders are unlikely to tender shares that they can sell in the market for Y216.
Traders say that Sanyo’s shares are popular with retail investors because of the company’s prospects in batteries and solar energy, although Goldman Sachs is a known seller of its remaining 13.3 per cent stake.
The market price on Sanyo’s shares may become an issue for Panasonic once it has taken control, because it will need to inject new capital into Sanyo to support its growth.
Copyright The Financial Times Limited 2009. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
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