Bloomberg News

KKR, Toshiba Said to Proceed in Bidding for Panasonic Division

June 14, 2013

KKR, Toshiba Said to Proceed in Bidding for Panasonic unit

Attendees visit the Panasonic Corp. booth at the CEATEC Japan 2012 exhibition in Chiba, Japan. Panasonic reversed its full-year profit target in October, forecasting a deficit 30 times bigger than analyst estimates as sales of TVs, handsets and personal computers slumped. Photographer: Junko Kimura/Bloomberg

KKR & Co. (KKR:US) and Toshiba Corp. (6502) were picked to make second-round bids for a stake in Panasonic (6752) Corp.’s health-care unit, said two people with the knowledge of the matter.

Panasonic, Japan’s largest consumer electronics maker by sales, received first-round offers that valued the division at about 200 billion yen ($2.1 billion) and shortlisted bidders earlier this week, the people said, asking not to be identified as the process is private. A second round of bidding will take place as early as in July, one person said.

Selling part of the unit, which runs blood banks and provides hospice care, will help Osaka-based Panasonic focus on a 250 billion-yen plan to restructure its money-losing consumer electronics business during the next two years. Fewer than 10 suitors made offers for the unit in the first round of bidding, people familiar with the matter said in May.

Bank of America Corp. (BAC:US) is advising Panasonic, according to the people. Panasonic spokeswoman Megumi Kitagawa declined to comment, as did spokesmen for KKR and Toshiba.

Panasonic’s electronics unit makes televisions, semiconductors, mobile phones, circuit boards and optical devices. Proceeds from a sale will help Panasonic meet a target to generate 200 billion yen in free cash flow in the fiscal year through March 2014.

U.S. private equity firm TPG Capital also participated in the first round of bidding for the health-care unit, people with knowledge of matter said last month.

Panasonic was receiving ’various offers’ for the health-care operation, Chief Financial Officer Hideaki Kawai said in an interview May 15.

“Though we have a blood-sugar sensor business that has a large volume and high margins, we don’t have many other such core products,” Kawai said. “We’d like to find a partner that can bring capital, technology and marketing power.”

KKR, the buyout firm run by billionaires Henry Kravis and George Roberts, in April said it hired Hirofumi Hirano, the former chairman of Nikko Principal Investments Japan Ltd., to head its operations in the country.

To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net; Mariko Yasu in Tokyo at myasu@bloomberg.net; Shigeru Sato in Tokyo at ssato10@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Chitra Somayaji at csomayaji@bloomberg.net


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Companies Mentioned

  • KKR
    (KKR & Co LP)
    • $22.58 USD
    • 0.09
    • 0.4%
  • BAC
    (Bank of America Corp)
    • $17.71 USD
    • 0.09
    • 0.51%
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