Panasonic/Sanyo To Divest NiMH Battery Operations To FDK
By Greg Tarr -- TWICE, 11/24/2009
Washington - Panasonic and Sanyo Electric have agreed to sell assets related to Sanyo's portable NiMH battery business, including a premier manufacturing plant in Japan, to Fujitsu-subsidiary FDK as part of an agreement with the Federal Trade Commission (FTC).
The move was required by FTC to preserve competition in NiMH battery production for portable electronics and other devices before proceeding with Panasonic's proposed $9 billion acquisition of Sanyo.
The FTC pointed out that the NiMH batteries produced by the business in question are used to power two-way radios, among other products, that are used by police and fire departments nationwide.
Under a proposed FTC consent order, the portable NiMH battery assets will be sold to FDK . The FTC said, "The sale of the assets resolves competitive concerns that were raised by the transaction, which combines the world's two largest manufacturers and sellers of these batteries."
No competitive concerns were raised by other overlaps between the companies, according to the statement.
"Our nation's police and fire departments rely on portable nickel metal hydride batteries to power the two-way radios that they use every day as part of their public safety missions," stated Richard Feinstein, FTC Bureau of Competition director. "The consent order announced today protects consumers by preserving competition in the market for these critical batteries."
According to the FTC's complaint, Panasonic's acquisition of Sanyo, as originally proposed, would have reduced competition in the worldwide market for portable NiMH batteries.
NiMH batteries are one of three commonly used rechargeable battery technologies. While each type of battery is used to power electronic devices, portable NiMH batteries comprise their own market, because current consumers of the batteries cannot substitute between them without buying new devices, the FTC said.
The FTC said its investigation of the Panasonic/Sanyo transaction also included "a thorough review of the deal's potential competitive impact in the hybrid electric vehicle (HEV) battery market.
Although Panasonic and Sanyo have been the most significant suppliers of the NiMH batteries used in most current-generation HEVs, improvements in li-ion technology have made li-ion HEV batteries a superior alternative to NiMH HEV batteries."
Besides Panasonic and Sanyo, there are a number of firms already supplying li-ion HEV batteries to automakers for future HEVs, the FTC said it has found.
"To the extent that NiMH HEV batteries are used in future HEVs, they will compete directly against li-ion HEV batteries. In the HEV battery market, the proposed transaction does not raise competitive concerns," the statement said.
Sanyo and Panasonic must divest Sanyo's assets in portable NiMH batteries to FDK within 15 days of Panasonic's acquisition of Sanyo. The timetable may be extended 30 days to provide the European Commission time to approve the divestiture.
The order encompasses a major portable NiMH battery manufacturing facility in Takasaki, Japan, that produces about 30 percent of all such batteries worldwide, the FTC said.
The order also requires Sanyo to supply FDK with certain sizes of portable NiMH batteries that are not produced at the Takasaki plant, but that account for a small part of Sanyo's overall portable NiMH battery sales.
Sanyo must also provide FDK with access to certain Sanyo employees who are needed to successfully run the Takasaki plant, and to transfer all licenses, patents and intellectual property related to its portable NiMH batteries to FDK.
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