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

• FedEx Corp. (FDX) mixed bad news with good in its latest quarterly report. After posting a profit for its second fiscal quarter, the package delivery giant also said it’s suspending pension contributions, freezing new hires, cutting its CEO’s pay by 20% in order to cut $800 million by the end of its fiscal 2010, Reuters reported.

• Wal-Mart Inc. (WMT) store representatives told Bloomberg that the world’s largest retailer would begin selling Apple Inc.’s (APPL) iPhones by the end of the year. The move is seen as positive for both companies, as it gives Wal-Mart a hot new item and Apple a gigantic new sales outlook.

• General Motors Corp. (GM) denied a report yesterday (Thursday) that the company reopened merger talks with Chrysler LLC. The report first appeared in The Wall Street Journal. “We have had no talks with them since we announced during our third-quarter earnings call that the talks had been suspended,” GM spokesman Tony Cervone said, Reuters reported.

• Credit card firm Discovery Financial Services (DFS) added itself to the list of companies applying to become a bank holding company, thus making it eligible for federal TARP money. The company also reported a $432 million profit in its fiscal fourth-quarter, up from a $56 million loss the previous year, MarketWatch reported.

• The Labor Department said yesterday (Thursday) that the number of filings for initial jobless benefits fell to a seasonally adjusted 554,000 from an upwardly revised figure of 575,000 the previous week. Still, claims remain near the highest level since 1982.

• Goldman Sachs Group Inc. (GS) has agreed to share its 29% in Sanyo Electric Co. Ltd. (OTC: SANYY) to Panasonic Corp. (ADR: PC) for at least $6.4 billion, Reuters reported. The purchase will make Panasonic Japan’s No. 2 electronics manufacturer after Hitachi Ltd with $120 billion in annual sales. Goldman had previously rejected two other offers from Panasonic.

• The U.S. economy will begin to rebound late next year or early in 2010, IMF Managing Director Dominique Strauss-Kahn told Spanish newspaper Expansion. He based this view on the likelihood that the housing market will soon bottom and demand will follow the recent wave of fiscal stimuli. Though he added: “We recognize, however that the possibility of a recovery is plagued with uncertainty.”

• Carnival Corp. (CCL), the world’s largest cruise operator, reported a 4% rise in fourth-quarter earnings yesterday (Thursday), but lowered its 2009 outlook as consumers will likely cancel or delay vacations for the next year. The company’s quarterly revenue rose 6% to $3.3 billion.

Source: Global Investing Roundups Friday, December 19th, 2008