Panasonic Corp., the world's largest consumer electronics maker, gained Sanyo Electric Co.'s endorsement to take control of the company, clearing the way for negotiations with creditor banks.

The companies will discuss a capital and business alliance with the goal of making Sanyo a subsidiary of Panasonic, they said in a statement today. The Osaka-based companies, which didn't provide pricing details, said progress on the discussions will be announced in December or when an agreement is reached.

Acquiring Sanyo would help Panasonic boost its rechargeable- battery operations and gain access to the solar-cell business, allowing the companies to shave costs and expand sales networks. The agreement is positive for both companies because it will bolster their presence in the market for batteries used in electronics, Nikko Citigroup Ltd. said.

`` The main objective would probably be expansion of the lithium-ion battery business, as Panasonic would take an overwhelming global lead in batteries for mobile handsets, notebook PCs and automobiles,'' Kota Ezawa, a Tokyo-based analyst at Nikko Citi, wrote in a Nov. 3 report. ``In dealing with automakers in particular, combined technological strength and scale could be very effective.''

The companies said their board members approved the plan at meetings today.

Business Alliance

``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,'' Panasonic and Sanyo said.

Panasonic and Sanyo said they will hold a briefing at 7 p.m. in Osaka today to provide more details.

Sanyo reorganized its operations to focus on solar and rechargeable batteries after a bailout by Goldman Sachs Group Inc., Sumitomo Mitsui Banking Corp. and Daiwa Securities SMBC Co. for 300 billion yen ($3.1 billion) in 2006.

The banks hold preferred shares equivalent to 70 percent of Sanyo, received when they bailed out the company. The creditors agreed to hold the securities until March 2009 and need Sanyo's approval to sell before then.

 Source:Bloomberg