Panasonic aims to buy ZKW Group, which owns a plant in Guanajuato
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Japanese manufacturer Panasonic is in talks to buy European automotive light and electronics maker ZKW Group, accelerating its push into the automotive market, a person familiar with the matter revealed to Reuters.
The deal could be worth up to US$ 1 billion and the two companies could reach a basic agreement before the end of this year, the Nikkei business daily reported.
An acquisition of ZKW would expand Panasonic's automotive lineup, which currently centers on batteries and navigation systems, as it shifts its focus to corporate clients to escape price competition from lower-margin consumer electronics manufacturers.
Panasonic said in a statement the reported deal was not something it had announced, and declined to comment further. ZKW also declined to comment.
The Austria-based company employed more than 5,900 staff at the end of last year and has plants in Austria, India, the Czech Republic, Slovakia, China, the United States and Mexico, according to its website.
The Mexican facility is located at Silao, Guanajuato, and was officially inaugurated last May.
Privately held ZKW supplies light-emitting diode headlights and lighting modules to U.S. and European automakers such as General Motors and BMW. It forecasts sales of about 900 million euros (US$ 949.59 million) in 2016.
"ZKW is among various deals that Panasonic is considering," said the source, who was not authorized to discuss the matter and asked not to be named.
"But no details have been decided and the deal could fall through," he said.
Panasonic has earmarked 1 trillion yen (US$ 8.80 billion) for strategic investments including mergers and acquisitions for the four years through March 2019. Of that amount, 70 percent has been already completed or allocated for specific deals, the company has said.
The possible acquisition comes at a time when rival electronics makers are also pushing into the automotive industry. Samsung Electronics Co Ltd agreed in November to buy Harman International Industries in an $8 billion deal.
Last year Panasonic took a 49 percent stake in Spanish automotive mirror manufacturer Ficosa International and plans to contribute US$ 1.6 billion to Tesla Motors' US$ 5 billion battery factory.