Is clean tech the driver behind Panasonic's raid on Sanyo?

Electronic giant Panasonic's proposed takeover of Sanyo is reportedly being driven by the company's desire to get its hands on Sanyo's impressive clean tech portfolio.

According to Associated Press reports this week, analysts are convinced that the ongoing takeover talks between the two companies – which were confirmed earlier this month and could result in a acquisition worth between $5bn (£3bn) and $8.5bn – are being motivated in large part by Panasonic's interest in Sanyo's solar and battery operations.

Koya Tabata, an analyst for Credit Suisse, told the news agency that Sanyo's presence in a number of clean tech markets – which includes energy efficient air conditioning and water purification technologies, as well as thin film solar cells and rechargeable batteries for hybrid and electric cars – was the main reason behind Panasonic's interest in the firm.

Sanyo's clean tech operations are also believed to be delivering a stronger financial performance than the rest of the company.

According to Associated Press, about half of Sanyo's revenue in the first half of this fiscal year came from a category it calls components, which includes semiconductors, rechargeable batteries and solar technologies. Yet the division generated 94 per cent of the company's operating profit, while its more established consumer electronics division continued to lose money.

Panasonic's president, Fumio Ohtsubo, also hinted at the attraction of the Sanyo's clean tech business earlier this month, admitting that falling prices for electronic devices meant the company needed "another engine for growth".

While a number of Japanese electronic firms such as Mitsubishi Electric and Sharp have emerged as significant players in the clean tech space with sizable solar panel operations, Panasonic, formerly Matsushita Electric Industrial Co, has been slower off the mark and has yet to dip its toe into the solar market.

In contrast, Sanyo has emerged as a major player in the thin film solar market with its Heterojunction with Intrinsic Thin-layer (HIT) cells and is engaged in an ambitious programme to build 600MW of production capacity by 2010 with a view to winning 10 per cent of the global thin film market.

Panasonic's presence in the fast expanding battery market is more established with the company providing rechargeable batteries to hybrid car market leader Toyota. But again Sanyo's rechargeable battery portfolio is seen as a potential area for growth, with the firm claiming to be the market leader in rechargeable battery technologies and reportedly boasting supply deals with Volkswagen, Honda and Ford.