In a bid that could raise as much as $1 billion, ailing Japanese electronics company Panasonic has tapped Merrill Lynch to find bidders that will invest in its healthcare business unit.
Merrill Lynch will put the business up for bidders in May. According to Reuters, potential bidders include private equity groups like Bain Capital and the Carlyle Group.
Panasonic president Kazuhiro Tsuga told reporters last month that he planned to sell the healthcare business as a way of shifting Panasonic away from consumer electronics. The company plans instead to focus on supplying components and devices to other companies.
Dumping the healthcare unit, which primarily manufactures blood sugar monitoring devices and medical chart systems, isn't Tsuga's only attempt to raise money for his company. Panasonic sold a large office tower in Tokyo for $500 million and also unloaded a majority stake in Japanese transportation company, Nippon Express.
Tsuga hasn't been entirely clear about his intentions for the healthcare business. Most analysts expect Panasonic to sell outright, but some say that Panasonic simply wants a partner that can grow the business segment to enhance profitability.
Panasonic, according to comments from Tsuga, has been "one of the losers" in the consumer electronics industry. Its biggest misstep was the acquisition of Sanyo in 2009, which was a heavy investment in plasma TV technology.
As plasma TV prices have tanked and the technology has fallen out of use, the company has lost nearly 20 percent of its share price. According to a statement, Panasonic has completely discontinued the development and production of plasma display panels.
Panasonic announced a partnership with Sony to develop OLED products in 2012, but the company has hesitated to jump in until it's certain about demand for OLED and the process for mass production of OLED screens.
It's a sign of Tsuga's hesitance to rely on consumer electronics investments after Panasonic's disastrous plasma miscalculation.
Edited by
Braden Becker
