Following recent rumours that Panasonic were preparing to buy Sanyo, the two companies have now started discussions about a possible alliance. Panasonic and Sanyo are starting an “intensive discussion on the capital and business alliance between both companies based on the premise of making SANYO a subsidiary of Panasonic, keeping a variety of options in mind” with a target date of the end of December 2008.

Panasonic Press Release

Panasonic and SANYO Agree to Start Discussions for Capital and Business Alliance

Osaka, November 7, 2008—- Panasonic Corporation (NYSE: PC/ TSE:6752, “Panasonic”) and SANYO Electric Co., Ltd. (TSE 6764, “SANYO”), upon the resolutions of the meetings of their respective Boards of Directors held today on November 7, 2008, agreed to start discussions for capital and business alliance between Panasonic and SANYO.

Panasonic and SANYO will start discussions, with the aim of maximizing both companies’ corporate values by pursuing synergies between both companies and further strengthening initiatives to achieve potential revenue and profit growth through this alliance.

1. Purpose
Panasonic has been challenging under the “Panasonic” brand to generate “ideas for life” for the future. Through innovative thinking, Panasonic is committed to enriching people’s lives around the world and thereby contributing to the development of society and future of the world. On the other hand, SANYO has been seeking to become a “Leading provider of Environment- and Energy-related products,” which significantly contributes to enhancing the global environment and enriching people’s lives, under its management philosophy stating “We are committed to becoming an indispensable element in the lives of people all over the world.” Gathering together the accumulated technologies and manufacturing knowledge of both companies, we believe that we will evolve to a corporate group which will be highly admired globally by enhancing the quality of life for the people worldwide and coexisting in harmony with the global environment. Through this capital and business alliance based on the premise of making SANYO a subsidiary of Panasonic, we aim to share both companies’ management know-how and business resources while collaborating with each other, thereby creating a global competitive foundation which will maximize corporate values of both Panasonic and SANYO and bring benefit for both companies’ shareholders and all other stakeholders, including customers and employees.

2. Effect of the Collaboration between Panasonic and SANYO
In the Energy Business Domain, both Panasonic and SANYO will be able to utilize their complementary technology by cooperating with each other in order for both companies to contribute to the development of the rechargeable battery market as well as its provision of global sales networks in order to expand SANYO’s solar and energy businesses. In the Electronics Business Domain and the Ecology Business Domain, we can both expand the range of products and mutually utilize each other’s sales channels, in each of the digital, commercial, device and white goods businesses included in these domains. Moreover, we can aim to reduce the production and development cost through technical collaboration.

In addition to enhancing efficiency of purchasing through joint procurements, Panasonic can share its accumulated know-how on cost reduction with SANYO, thereby enhancing SANYO’s profitability in every business domain. Panasonic would also like to apply SANYO’s remarkable mass production techniques to Panasonic’s operation. Both companies will further the best operations of both companies in other areas, without regard to the origin company of the method.

3. Future Schedule
Considering the above, Panasonic and SANYO will immediately set up a project team, to start intensive discussion on the capital and business alliance between both companies based on the premise of making SANYO a subsidiary of Panasonic, keeping a variety of options in mind. We aim to maximize corporate values of both Panasonic and SANYO to bring benefit for both companies’ shareholders and all other stakeholders including customers and employees.

After earnest discussion between both companies, we will disclose the subsequent progress of the discussions between both companies at around the end of December 2008. If we reach an agreement earlier, we will disclose the progress promptly after the agreement is made.

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