S&P: Sanyo on positive watch, Panasonic on watch

Standard & Poor's said it placed its AA- long-term and A-1+ short-term corporate credit ratings and AA- long-term unsecured debt rating on Panasonic Corp. on Creditwatch with negative implications, and its BB long-term corporate credit and BB+ long-term unsecured debt ratings on Sanyo Electric Co. Ltd. on Creditwatch with positive implications, following the official announcement that Panasonic would move to acquire Sanyo.

At the same time, the agency said it placed its AA- long-term and A-1+ short-term corporate credit ratings on Panasonic Finance (America) Inc., as well as the A-1+ rating on the company's commercial paper program, on Creditwatch with negative implications.

On Nov. 7, the two companies announced that they would start discussions aimed at forming a capital and business alliance based on the premise of consolidating Sanyo as a subsidiary, S&P noted, adding that this acquisition will enable Panasonic to strengthen its business franchise through the addition of Sanyo's strongly competitive batteries business, which Panasonic has identified as a growth area.

However, the financial burden associated with the acquisition will inevitably impact Panasonic's strong financial base, which is characterized by an abundant cash position and a sound capital structure, the agency added.

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