Panasonic said on Thursday it has agreed to sell its Sanyo brand washing machine and refrigerator business in Japan and Southeast Asia to Chinese rival Haier.
Panasonic, which makes Viera TVs and Lumix cameras, said the deal for Haier Group is set to be completed by March 2012.
Panasonic said the agreement with Haier was part of a bigger effort to reshape its operations.
ADVERTISEMENT
It did not give a value for the deal. It would be the first large-scale acquisition of a major Japanese consumer appliance business by a Chinese company.
Haier Vice-President Du Jingguo welcomed the Sanyo deal, calling it an “important milestone for both companies.”
Haier has been trying to expand its business in Japan but struggled to woo finicky Japanese consumers and remains a small player, unlike in the rest of the world.
ADVERTISEMENT
Under the deal, Haier will acquire a range of Sanyo businesses, including washing machines, refrigerators, air-conditioners, microwaves, vacuum cleaners, rice-cookers, coffee-makers, juicers, toasters and irons in Japan, Indonesia, Malaysia, the Philippines and Vietnam, it said in a statement.
“Haier aims to be a leader in the global white goods business,” said Mr. Du.
“Acquiring the white goods business of Sanyo is an important part of Haier’s overall growth strategy,” he said.
Sanyo said the deal will ensure employees have jobs and that consumers will continue to enjoy Sanyo products.
Panasonic officials said they were confident about competing because of Panasonic’s strengths in more sophisticated gadgets and ecological technology.
Pansonic reports quarterly loss
Panasonic slumped to a 30.4 billion yen ($389 million) quarterly loss, hit by lower sales after the earthquake in northeastern Japan.
Panasonic maintained its forecast for a 30 billion yen ($385 million) profit for the fiscal year ending March 2012, which would be about half the profit for the previous year.
It had chalked up a 43.7 billion yen profit for the April-June period the previous year.
Like other Japanese manufacturers, Panasonic suffered a huge setback from the March 11 earthquake and tsunami that devastated the northeastern coast and killed more than 22,000 people.
Consumer spending has dropped amid national mourning over the disaster. The tsunami also sent a nuclear power plant into meltdown, spewing radiation into the air and water and contaminating beef, vegetables and other products, further crimping spending.
Panasonic’s quarterly sales dropped 11 per cent to 1.93 trillion yen ($25 billion), mainly because of the earthquake, the Osaka-based manufacturer said. Sales were down in flat-panel TVs, auto electronics, cell phones and devices, it said.
Sales were down not only in Japan but also in Europe and the U.S.
Air conditioner sales in Japan were one exception because of worries about a power crunch caused by the nuclear crisis. Consumers have been snatching up energy efficient appliances.
A strong yen also hurt Panasonic, erasing 19 billion yen ($244 million) from its operating profit for the latest quarter.
Panasonic stock inched up 0.5 percent to close at 929 yen in Tokyo, where trading ended before earnings were announced.