Gorenje acquisition – Possible Panasonic share increase good sign for Velenje factory, potential market expansion for Serbian facilities

Japan’s Panasonic is carrying out due diligence of Gorenje, and when the analysis is finished in September, it will become known whether Panasonic will increase its ownership share or even take over the Velenje factory.

In Gorenje, they confirm for eKapija that the two companies have signed an array of legal documents defining various conditions under which Panasonic is allowed a thorough inspection of Gorenje Group operations until September 30, 2016. As they point out, the managing board has allowed Panasonic a thorough inspection by taking a stance that the company is its long-term strategic partner, that it benefits the company and that strengthening the cooperation with Panasonic increases the potential for fast growth and the realization of the strategic plan.

– A detailed inspection can result in Panasonic’s decision to increase its share in Gorenje, but no decision to that end has yet been adopted – they say in Gorenje and add that there are no signals as to what the Japanese corporation will decide.

Panasonic first entered Gorenje in 2013, when it acquired a 10.74% share in the Velenje-based household appliances producer. Last year, it bought an additional 1.2%. The media are speculating about the aim of the due diligence being an increase to 20%, but also the possibility of acquiring the control stock.

Deputy editor-in-chief of Belgrade’s Novi Magazin, Mijat Lakicevic, believes that the acquisition would be a big deal for Gorenje.

– This would show that they’re a serious company with good prospects. I’m not sure what it would bring to Slovenia and Velenje, but, for them, it’s good news for sure – our interviewee says.

Gorenje, one of the leading household appliances producers in Europe, cooperates in the Serbian market with all the household appliances retailers, a wide-reaching service network and three factories, in Valjevo, Stara Pazova and Zajecar. What the effect of the acquisition would be on Gorenje’s operations in Serbia is still hard to tell, according to Lakicevic.

– In principle, this is a good thing, because, if the factories are competitive, it can mean the opening of the world markets in Which Panasonic is present. It can also lead to an expansion of production of, say, spare parts or components for other machines, which is a big, long-term job. All this, of course, in case Panasonic doesn’t assess that the factories’ operations are not world-class and decides to close them down.

Disregarding the fact the Panasonic’s decision is not yet known, in Gorenje they say that the conditions for carrying out the due diligence also encompass the strategic guidelines regarding Gorenje’s future role in Panasonic Group, in case Panasonic buys the control stock in Gorenje.

They also point out that the first three years of Gorenje and Panasonic’s partnership have been very positive and that further integration may bring Gorenje a faster development and more jobs in the region, since Panasonic doesn’t have its own production in Europe.

– Gorenje’s management has emphasized its openness for strategic partnerships in its operating strategy until 2020, whether it’s industrial partnerships or joining the assets with household appliances companies. Of course, these strategic partnerships should benefit all partners and increase Gorenje Group’s competitiveness. It is especially important, in addition to strengthening the bonds, to increase the synergy of companies operating in different fields on joint projects in Gorenje, which would double Gorenje’s income each year.

Panasonic started the due diligence of the Velenje-based factory on July 13, and the official announcement caused a significant jump in the value of the shares of the company, which makes more than a billion euros in sales income a year.

In Serbia, in addition to Gorenje, Japan’s Panasonic operates as well, but not through a household appliances program. In the production facility in Svilajnac, electronic devices for electric lights have been produced since 2011. Both companies are among the biggest exporters from Serbia.

I.B.

Gorenje d.d. Velenje

Panasonic Corporation

Gorenje shares

Gorenje acquisition

Gorenje operations

Mijat Lakicevic