Are Panasonic and their acquisition of the struggling Sanyo Corporation set to make them a world leader in green energy efficient technology?
At the recent CES Expo in Las Vegas I met with senior executives of Panasonic Japan to discuss the introduction of legislation by many governments including Australia that will force Companies like Panasonic to cut the energy output from devices like their plasma TV's.
The response was a demonstration of new panel technology that delivered a brighter screen and up to 40% less power consumption. At the time the Panasonic executives said "The management of power is critical to any Company competing in the consumer electronics market going forward".
As luck has it Panasonic is cashed up with over $6.5 billion in cash reserves this will allow them to bid for Sanyo sand their two highly successful green-energy divisions, solar cell technology and rechargeable batteries.
"We need another engine for growth," Panasonic President Fumio Ohtsubo told reporters, acknowledging that plunging gadget prices were eating away at electronics profits. "We need another pillar for far greater growth. And Sanyo was that best partner."
Currently Panasonic does not have a solar panel operation despite research showing that it is set to be a big growth market in the future as solar panels are set to be used to generate electricity for homes and businesses because of climate-change fears.
Sanyo also leads in rechargeable batteries, widely used in laptops and mobile phones. Their uses are expected to grow in cars, such as hybrids and electric vehicles, as emissions standards tighten. Panasonic makes batteries for all Toyota vehicles, but picking up Sanyo would be key because it supplies batteries for Volkswagen, Honda and Ford.
A Panasonic-Sanyo deal would be part of a long-running realignment in Japan's crowded electronics industry which is under enormous pressure with Companies like Pioneer, Hitachi and Fujitsu who are all struggling to compete in the consumer electronics market. These vendors including the likes of Sony, Sharp and Toshiba are also under pressure from Chinese manufacturers. This has forced many of them to form alliances.
For example, Panasonic has a partnership in liquid crystal displays for TVs with Hitachi and Canon Sony and Toshiba are working with Sharp to produce LCD panels.
According to Associated Press Panasonic has a dismal track record when it comes to making acquisitions. A Sanyo buyout would be a big test for Panasonic, which changed its name from Matsushita Electric Industrial last month, partly because of its ambitions to become a global player.
Panasonic sank into the red and eventually had to give up on the Hollywood movie studio MCA, which it bought in 1990 for $6 billion. Its half-century ownership of Victor Company of Japan which trades as JVC  produced results in early years and helped Panasonic beat archrival Sony in the VHS vs. Betamax video-format battle. But the partnership fizzled in the digital age, and the companies were unable to feed off each other's strengths. Victor is now part owned by Kenwood.

Analysts told AP that Panasonic may have an easier time swallowing Sanyo because they share corporate cultures. Sanyo was started by the brother-in-law of Panasonic founder Konosuke Matsushita. Both companies are based in Osaka, in central Japan.
At the outset, it's unclear what changes electronics buyers would see on store shelves. Ohtsubo has said he wants to keep both Panasonic and Sanyo brands in electronics — at least for a while. That could mean that consumers are likely to encounter products with different brand labels and prices slapped on them, but packed with nearly identical components.
But in the long run, if Panasonic hopes to stay lean and profitable, the Sanyo name may gradually grow less visible on consumer products. Given that Sanyo is losing money in electronics but making money in its battery and solar businesses, it's easy to see why those green-energy products could turn out to be Sanyo's enduring mark.