Japan's Panasonic Corp is in talks to buy European automotive light maker ZKW Group, accelerating its push into the automotive electronics market, a person familiar with the matter said. The deal could be worth up to $1 billion and the two companies could reach a basic agreement as early as this month, the Nikkei business daily reported Monday.
An acquisition of ZKW would expand Panasonic's automotive lineup, which currently centers on batteries and navigation systems, as it shifts its focus to corporate clients to escape price competition from lower-margin consumer electronics manufacturers.
"ZKW is among various deals that Panasonic is considering," said the source, who was not authorized to discuss the matter and asked not to be named. "But no details have been decided and the deal could fall through," he said.
Panasonic has earmarked 1 trillion yen ($8.80 billion) for strategic investments including mergers and acquisitions for the four years through March 2019. Of that amount, 70 percent has been already completed or allocated for specific deals, the company has said. The possible acquisition comes at a time when rival electronics makers are also pushing into the automotive industry. Samsung Electronics Co Ltd agreed in November to buy Harman International Industries in an $8 billion deal.
Panasonic is targeting annual sales of 2 trillion yen for its automotive business in the year ending in March 2019, up from 1.3 trillion yen in the last financial year that ended in March. Last year Panasonic took a 49 percent stake in Spanish automotive mirror manufacturer Ficosa International and plans to contribute $1.6 billion to Tesla Motors' $5 billion battery factory.
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Updated Date: Dec 05, 2016 09:32:56 IST