Slovenian household appliance manufacturer Gorenje announced on July 25 it has signed a set of legal documents with Japanese Panasonic Corporation which enable Panasonic to perform due diligence of Gorenje Group until September 30 and afterwards decide whether to increase its stake in the Slovenian company.
The statement did not say by how much Panasonic, which currently holds a 10.74% stake in Gorenje, plans to increase its shareholding. Gorenje implied that a takeover was possible. The Slovenian company wrote that the two companies had "agreed on the strategic guidelines for the future role of Gorenje within Panasonic Group, should Panasonic ... obtain effective control of Gorenje."
Back in 2014, Panasonic CEO Kazuhiro Tsuga said in an interview with Reuters that the company was looking for potential M&A deals to expand its position in the European white goods market.
Tsuga also said that Panasonic would consider acquiring companies worth "tens of billions" of yen, but did not plan to buy "a big company worth a trillion yen". This would fit Gorenje, whose market capitaliation is around €160mn (according to Reuters data), or just over YEN18bn.
Panasonic is one of the three largest shareholders in Gorenje, alongside state-owned pension fund manager Kapitalska Druzba which owns 16.37% and the International Finance Corporation with 11.8%.
Panasonic acquired a smaller stake under a strategic partnership agreement signed in 2013 and then increased it at the end of 2015. According to the strategic partnership Panasonic pledged to not increase its holding to over 13% without the management and supervisory boards’ permission.
“These activities may or may not lead to Panasonic's decision to launch a bid to increase its shareholding in Gorenje, but no decision on entering into any transaction has been made yet,” Gorenje said in a press release posted on the website of the Ljubljana Stock Exchange.
Gorenje, one of main Slovenian exporters, reported a net loss of €8mn for 2015, which followed a net profit of €1.2mn in 2014. The company planned to achieve profits of €6.1mn last year, according to its unaudited financial report for 2015 published on March 11.