The merger would create Japan’s second-largest electronics manufacturer behind Hitatchi Ltd. (ADR:HIT), as Panasonic is the world’s No. 1 plasma TV maker and Sanyo is one of the world’s largest rechargeable battery makers, Reuters reported.

Should the deal clear regulators, Panasonic said one of its intentions is restructuring both companies. It targeted three “primary synergy” areas:

• Solar: The combined company plans to expand its silicon solar cells and batteries and accelerate development and commercialization of next-generation solar cells. Panasonic expects “a significant increase” in solar sector sales.

• Rechargeable Batteries: In addition to fusing Sanyo’s lithium-ion rechargeable batteries business with Panasonic’s black box technology, the companies plan to make “active investments” in batteries for hybrid electric vehicles and electric vehicles. More practically, the deal would nearly quadruple Panasonic’s share of the rechargeable-battery market.

• Financial and Business Position: Panasonic believes the combined enterprise will produce cost cuts in procurement and logistics.

“Panasonic and Sanyo recognize that existing strategies must not only be accelerated, but also that drastic action is now required for further strengthening initiatives to achieve potential revenue and profit growth in the global economic recession stemming from the financial crisis as well as in the midst of intensified global competition,” Panasonic said in a statement.

The company added: “Combining the accumulated technologies and manufacturing knowledge of both companies, Panasonic and Sanyo believe that together they will evolve into a corporate group which will be highly admired globally by enhancing the quality of life for the people worldwide and becoming a business entity coexisting in harmony with the global environment.”

The deal cleared a major hurdle Thursday when Goldman Sachs Group Inc. (GS) agreed to share its 29% in Sanyo to Panasonic for at least $6.4 billion, Reuters reported. Goldman had previously rejected two other offers from Panasonic.

“A merger would supply much-needed funds for Sanyo to maintain its position in the solar-battery market,” Yuuki Sakurai, general manager of investment planning at Tokyo’s Fukoku Mutual Life Insurance Co., told Bloomberg. “It’s difficult to imagine Sanyo succeeding by going it alone, and in that sense the offer is progress.”

Sanyo was founded by Toshio Iue, who in 1946, quit his job at Panasonic’s former entity Matsushita Electric Industrial Co. to form Sanyo the following year, Bloomberg reported.

Source: Panasonic Offers $9 Billion for Controlling Stake in Sanyo

Oil fell towards $45 a barrel on Friday, after the collapse of a $14 billion rescue for U.S. automakers caused heavy losses across global financial markets and Goldman Sachs predicted oil could fall to $30 a barrel.

U.S. crude oil for January delivery was down $2.95 at $45.03 a barrel by 1119 GMT.

Prices rallied more than $4 on Thursday to a session high of $49.12 a barrel before dropping back in late trading.

Oil sank to $40.50 last Friday, its lowest in 4 years.

London Brent crude was down $2.98 at $44.41.

The plight of the big U.S. auto firms, including General Motors Corp and Chrysler, illustrates the severity of the global economic downturn that has hit demand for oil.

“The collapse in world oil demand in the fourth quarter of 2008 as the global credit crunch intensified, now threatens to push oil prices below $40 a barrel in the near term,” Goldman Sachs said in a research note.

“The impact of the global economic recession has swung the oil market from pricing demand destruction in 2008 to pricing supply destruction in 2009.”

The U.S. investment bank, which earlier this year had predicted $200 per barrel oil, virtually halved its 2009 price forecast for U.S. crude to $45 and said the price could fall to $30 in the short term.

Goldman analyst Arjun Murti, who predicted a super-spike in oil to $100 in 2005, said prices would hit a trough in the first quarter.

The bank said a cut of an extra 2 million barrels per day was needed from OPEC, which meets next on Dec. 17 in Algeria.

French bank BNP Paribas cut its 2009 price forecast to $53 a barrel from $75 previously.

Crude has shed two-thirds of its value over the last five months, down about $100 from a record of $147.27 in July.

It rebounded more 10 percent on Thursday in anticipation of a big supply cut from the Organization of the Petroleum Exporting Countries.

OPEC’s President Chakib Khelil has called for more “severe” supply cuts at next week’s meeting.

Russia’s President Dmitry Medvedev has also weighed in, saying the country was ready to work with OPEC on possible oil output cuts.

Japan’s Nippon Oil said it expected OPEC to agree to cut 1.5-2.0 million bpd next week.

“Chances for a 2.5 mln bpd cut are possible, but that would put increased criticism on OPEC amidst the economic slowdown, so I think the likely cuts are up to 2 mln bpd,” Kazuyoshi Takayama, Nippon Oil’s general manager, told reporters on Friday.

Jane Merriman, Jennifer Tan, Osamu Tsukimori
LONDON, Dec 12 (Reuters)