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Sanyo invites bids for chip business

Posted: 19 Apr 2007 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor business unit? business spin-off? mobile phone business?

Carrying on its spin-off plans, Sanyo Electric has started the sale of its semiconductor business unit and is expecting bidders before end of the month, according to a report from Financial Times. Investment bank Goldman Sachs & Co. reportedly sent letters to large private equity groups and semiconductor companies, inviting them to bid for the unit.

Among the contacted companies are private equity groups Blackstone, Carlyle, Cerberus, Kohlberg Kravis Roberts, Permira and Texas Pacific Group; Japanese semiconductor makers Elpida, Renesas and Rohm; and foreign companies, including Hynix and Infineon.

According to the report, Sanyo is considering schemes that will enable the business to grow. The sale of the IC business comes at a tumultuous time for the company, which also appointed a president early this month.

The embattled company is expecting its third consecutive annual loss for the fiscal year ended March 31 after reporting a net loss of about $1.72 billion last year, and a loss of $1.4 billion in.

Sanyo is the middle of a restructuring program driven by its largest shareholdersSumitomo Mitsui Bank, Goldman and Daiwa SMBC. The four companies control about 60 percent of the group's voting rights after investing a combined $2.5 billion.

Sanyo's semiconductor business suffered a sharp plunge after an earthquake damaged a factory in 2004.

Stockholders are reportedly demanding the company to spin-off its digital camera business and mobile phone business after a venture with Nokia fell through last year. A potential investor commented that Sanyo may have to seek a partner for its solar battery business to maintain investment.

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