Panasonic CEO says considering home appliance M&A in Europe

[November 10, 2014]  By Ritsuko Ando and Reiji Murai

TOKYO (Reuters) - Japanese electronics conglomerate Panasonic Corp is considering M&A deals to bolster its position in the European home appliance market, its chief executive said on Monday, as it shifts its focus to growth following years of restructuring.

"We need a partner who understands the European market in the white goods segment," CEO Kazuhiro Tsuga, credited with leading the company's turnaround since his appointment in 2012, told Reuters in an interview.

Panasonic returned to a positive net cash position last quarter for the first time in five years, a year and a half ahead of schedule, after exiting unprofitable product lines in smartphones, plasma TVs and semiconductor chips.

In contrast to Sony Corp, another Japanese consumer electronics icon struggling with deep losses in TVs, smartphones and other consumer electronics, Panasonic has been turning to new growth areas such as advanced driver assistance systems that look into blind spots or aid in parking. It is also supplying batteries to electric car maker Tesla Motors Inc.

While Panasonic's transformation has shifted its focus to the automotive sector and other industrial clients, it also sees home appliances - unlike smartphones and other gadgets it has quit or pared back - as a potentially profitable area where it could tap its expertise in power-saving technologies.

Panasonic is aiming for 10 trillion yen ($90 billion) in revenue in the 2018/19 financial year compared with a target of 7.75 trillion yen in the current year to March, and has said this could be achieved in part through acquisitions.

Tsuga said Panasonic had room to expand in home appliances, particularly in Europe where it is a minority shareholder in Slovenian appliance maker Gorenje under an alliance that includes joint manufacturing and sales.

"We could deepen this partnership, or pursue other alliances," Tsuga said. Asked whether that could include an acquisition, he said: "I wouldn't rule that out. That's currently under consideration."

Tsuga said the company had no intention of buying big companies worth $10 billion or more, but companies valued in the hundreds of millions of dollars would be reasonable targets.

He added that keeping the net cash position in positive territory was not an absolute requirement and the company could opt to issue debt in order to pursue a good investment.

"We shouldn't be too bothered by temporary swings in our net cash position," he said.

(Editing by Chang-Ran Kim and Edmund Klamann)

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