PANASONIC has confirmed it will buy fellow air conditioning manufacturer Sanyo for £5.5 billion in a deal that will see the creation of one giant firm worth £69 billion.
Panasonic's agreement on Friday to make Sanyo Electric Co. a subsidiary in spring of 2009, will create the world's second-largest electronics firm.

Panasonic president Fumio Otsubo said, in a joint press conference on November 7 with Sanyo president Seiichiro Sano, 'Sanyo has excellent technological capability and merchandise planning ability in the environmental energy field [such as solar cells].'

The ac manufacturers also said 'Through this capital and business alliance based on the premise of making Sanyo a subsidiary of Panasonic, we aim to share both companies' management know-how and business resources while collaborating with each other, thereby creating a global competitive foundation which will maximize corporate values of both Panasonic and Sanyo. 'In the Energy Business Domain, both Panasonic and Sanyo, will be able to utilize their complementary technology by cooperating with each other in order for both companies to contribute to the development of the rechargeable battery market as well as its provision of global sales networks in order to expand Sanyo's solar and energy businesses'.

The firms' statement also said 'In the Electronics business domain and the Ecology business domain, we can both expand the range of products and mutually utilize each other's sales channels, in each of the digital, commercial, device and white goods businesses included in these domains. Moreover, we can aim to reduce the production and development cost through technical collaboration.'

The firms' statement added 'In addition to enhancing efficiency of purchasing through joint procurements, Panasonic can share its accumulated know-how on cost reduction with Sanyo, thereby enhancing Sanyo's profitability in every business domain. Panasonic would also like to apply Sanyo's remarkable mass production techniques to Panasonic's operation.'.

Both groups plan to publish more details of the progress made on their deal discussions, by the end of 2008.