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To Accelerate Push into Auto Electronics, Panasonic may buy ZKW: Reuters


12/05/2016


To Accelerate Push into Auto Electronics, Panasonic may buy ZKW: Reuters
Accelerating its push into the automotive electronics market, Japan's Panasonic Corp may buy European automotive light maker ZKW Group, reported news agency Reuters citing information derived from a person familiar with the matter.
 
While claiming that ZKW was not negotiating with Panasonic or other potential suitors, a spokeswoman for Austria-based ZKW dismissed the idea of a sale to Panasonic as "an old rumor".
 
However earlier on Monday, the Nikkei business daily reported that v and that a deal could be worth up to $1 billion.
 
"ZKW is among various deals that Panasonic is considering," the person familiar with the matter reportedly told Reuters.
 
"But no details have been decided and the deal could fall through," added the source, who was not authorized to discuss the matter and asked not to be named.
 
While declining to make any detailed comments, Panasonic said in a statement the reported deal was not something it had announced.
 
As Panasonic shifts its focus to corporate clients to escape price competition from lower-margin consumer electronics manufacturers, an acquisition of ZKW would expand Panasonic's automotive lineup, which currently centers on batteries and navigation systems.
 
U.S. and European automakers such as General Motors Co and BMW are the clients of ZKW which supplies light-emitting diode headlights and lighting modules to these companies. It forecasts sales of about 900 million euros ($950 million) in 2016.
 
According to its website, the privately-held group has plants in Austria, India, the Czech Republic, Slovakia, China, the United States and Mexico and has employed more than 5,900 staff at the end of last year.
 
For the four years through March 2019, 1 trillion yen ($8.80 billion) has been earmarked by Panasonic for the purpose of strategic investments including mergers and acquisitions. The company has said that 70 percent of the amount has been already completed or allocated for specific deals.
 
In recent years and months, rival electronics makers are also pushing into the automotive industry and the possible acquisition comes amidst such a business environment. In an $8 billion deal, Harman International Industries was agreed to be bought over by Samsung Electronics Co Ltd in November.
 
Up from 1.3 trillion yen in the year ended March, a target of annual sales of 2 trillion yen for its automotive business in the year ending March 2019 has been targeted by Panasonic.
 
Panasonic plans to contribute $1.6 billion to Tesla Motors' $5 billion battery factory and has taken up a 49 percent stake in Spanish automotive mirror manufacturer Ficosa International last year.
 
In other acquisiti0n deals, broadband service provider FairPoint Communications Inc. was announced to be bought in an all-stock deal valued at $1.5 billion, including debt, by Consolidated Communications Holdings Inc.
 
As growing demand for data and video services drives companies to expand their fiber optic networks in newer regions, Consolidated's acquisition of FairPoint marks the fifth such deal in the last two months.
 
By adding about 17,000 fiber route miles in the region, the deal will help Consolidated expand into northern New England.
 
(Source:www.reuters.com)