Panasonic to Absorb Wholly-Owned Subsidiary; Agrees to Capital and Business Alliance with Sanyo

Panasonic Corporation announced that its Board of Directors has decided that Panasonic will absorb Panasonic Semiconductor Device Solutions Co Ltd (PSCDS), a wholly-owned subsidiary of Panasonic. The merger is expected to take effect on April 1, 2009.

Through this merger, Panasonic said it will realize the vertically integrated business model from semiconductors such as image sensors to camera modules and utilize its semiconductor process and mounting technologies in camera modules, thereby strengthening the company's cost competitiveness. As management reforms, Panasonic will aim to reduce duplication of work and improve efficiency by unifying its indirect operations, and proactively promote broad exchanges of personnel and human resources development. This will ensure that the company enhances its global competitiveness in the automobile camera business and accelerate its growth strategies.

Meanwhile, the company, together with Sanyo, announce that they have entered into a capital and business alliance agreement. Panasonic will aim to acquire the majority of the voting rights of Sanyo assuming full dilution by means of a public tender offer bid. Both companies said they will form a close alliance in business with the prospect of organizational restructurings.

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