Japanese electronics maker Panasonic is poised to breaking into the U.S. food distribution industry following its recently announced acquisition of leading refrigeration firm Hussmann. The deal, announced in a press release Monday, values the company at $1.5 billion. Under the deal, Panasonic will buy total control of the company from private equity firm Clayton, Dubilier & Rice and industrial group Ingersoll Rand, thus making Hussman a wholly-owned subsidiary.
News of this acquisiton comes as electronics makers have been moving away from less profitable products like smartphones and plasma television sets, instead opting to focus on products like high-end cold storage, LED lighting and remote monitoring.
Panasonic, which has made similar moves in the past, said it is aiming to generate $2.1 trillion worth of sales in B2B solutions in 2018, with $2.5 billion of that coming from the food distribution business, reported Reuters. While it has managed to establish a position in this industry in Japan, China and other parts of Asia, it has yet to do so in the United States, which is the industry's largest market.
"We want to make (this acquisition) a trigger to accelerate our global business," said Panasonic's Chief Executive Kazuhiro Tsuga at a news conference. "We are likely to actively pursue overseas acquisitions."
Through this acquisition, "Hussmann's strengths in customer relationships, maintenance and services" will be combined with "Panasonic's wide-ranging technology and product lineup," according to CFO.
The transaction, which is subject to approval from competition and anti-trust authorities in relevant countries, is expected to close April 1, 2016.
