Panasonic Shares Gain on MOU to Sell Stake in Auto-Parts Unit
By Ronnie Harui
Panasonic Holdings' shares rose sharply on Monday, for a second straight session, after it signed a memorandum of understanding to sell a stake in its automotive components subsidiary to an affiliate of Apollo Global Management.
Shares were up 5.3% at 1,576.5 yen ($10.54) in morning trade after earlier touching Y1,606.50, its highest intraday level since Oct. 17. Shares had gained 5.5% on Friday.
The Japanese electronics company said Friday that it will continue talks with Apollo Global Management on an exclusive basis with the intention of finalizing details of the agreement by March 31, 2024.
If the transaction under the MOU is completed, Apollo will acquire a portion of Panasonic Automotive Systems, which is currently wholly owned by Panasonic.
The sale will improve Panasonic's financial efficiency, though this will depend on the sale value and the treatment of pre-sale assets and business units, Citi Research analysts said in a research note.
While Panasonic hasn't disclosed the stake to be sold or the sale value, Citi analysts assume a sale of a 50%-80% stake.
Panasonic Automotive Systems was set up as a business entity responsible for Panasonic's automotive business, and provides advanced technologies to vehicles in areas such as infotainment systems, the company said.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
November 19, 2023 22:04 ET (03:04 GMT)
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