With a ¥50 billion injection, electronics maker poised to become biggest shareholder

Panasonic to bankroll Olympus

Kyodo

Panasonic Corp. is making final arrangements to provide up to ¥50 billion in capital to Olympus Corp. in a move that will make it the top shareholder, according to sources.

Panasonic, struggling with sluggish TV sales, aims to secure a new source of revenue by forming an alliance with Olympus’ mainline medical equipment business, the sources said Tuesday.

Olympus, battered by a major loss coverup scandal, will get access to funds necessary for its restructuring as well as to Panasonic’s marketing resources, they said.

Olympus will reportedly issue shares to Panasonic in a private offering and the two companies are discussing a stake valued at somewhere between ¥30 billion and ¥50 billion.

Panasonic currently has some health care systems in its product lineup and hopes to make medical devices a core operation, the sources said. The company could supply Olympus with image sensors and high resolution monitors for gastrointestinal endoscopes, a product for which Olympus controls around 70 percent of the global market, according to the sources.

The two companies could also tie up in digital cameras, a product both companies currently sell.

Amid the loss coverup scandal, Olympus corrected past earnings statements in December and re-evaluated its assets, resulting in its consolidated capital adequacy ratio falling to 4.6 percent at the end of March, sharply down from 11 percent a year earlier.

Some executives in Olympus had wanted the company to rehabilitate without accepting outside capital, but it was eventually decided that funds were needed to implement restructuring steps like slashing more than 2,500 jobs and consolidating plants, the sources said.

Besides Panasonic, Sony Corp., Fujifilm Holdings Corp. and Terumo Corp. have offered to form a business alliance with Olympus.

Sony and Fujifilm were particularly keen on taking stakes and getting involved in Olympus’ operations, but the firm apparently wanted to limit the stake held by other companies, the sources said. Olympus opted for Panasonic because it was also keen on expanding business ties, according to the sources.