PANASONIC, the world's largest maker of consumer electronics, will seek to buy control of Sanyo from its biggest shareholders, a company official familiar with the negotiations said, Bloomberg News reported on Saturday.

Panasonic will make a formal acquisition proposal soon to Goldman Sachs, Sumitomo Mitsui Banking Corporation and Daiwa Securities SMBC, the official said, declining to be identified because the plan has not been publicly disclosed.

"It's not surprising to start to see some consolidation," said Ed Rogers, CEO at Tokyo-based hedge-fund adviser Rogers Investment Advisors.

Goldman and the two Japanese banks hold preferred shares equivalent to 70 percent of Sanyo, the world's biggest maker of rechargeable batteries. The shares were received when they bailed out the company in February 2006. They agreed to hold the securities until March 2009, and need Sanyo's approval to sell before then.

The preferred shares would be worth more than US$6 billion if converted to common stock at Friday's closing price of 145 yen (US$1.47).

Panasonic will begin talks to buy a majority stake in Sanyo to expand into the solar power business, the Nikkei newspaper reported in Japan on Saturday. Hiroyuki Okamoto, a spokesman for Sanyo, told Bloomberg News he wasn't aware of any such negotiations.

Solar business

Sanyo, the third-biggest solar panel producer in Japan, spent years losing money as competition prevented it from profiting on cameras and other consumer goods. The company refocused on rechargeable batteries and solar panels after the bailout, scaling back unprofitable lines such as computer chips.

Panasonic is looking to expand into the fast-growing solar market, while batteries hold growth potential as car makers move to develop electric vehicles.

"There are certain industries that are more efficient than others and therefore the less efficient ones are going to be facing consolidation," Rogers said. "A lot of guys have cash as Japan's had five of the healthiest years since World War II."

United States solar power installations grew by 45 percent last year, according to the Solar Energy Industries Association. Sanyo plans to expand solar cell production capacity by 60 percent at a Japanese plant, Kyodo News said on Friday.