KKR considers teaming with Japan state fund for Panasonic unit - report

According to Reuters, the US firm has not yet approached the unnamed fund.

Last week, KKR was set to gain preferential negotiating rights for the majority stake in Panasonic Healthcare in a deal worth up to $1.5 billion, which would be the private equity firm's largest in Japan to date.

Teaming up with state-backed Innovation Network Corp of Japan (INCJ) has been hinted as one of various options KKR could pursue. Neither party has commented.

KKR - which recently saw a final close of $6 billion on its largest ever Asia fund - had last year been thwarted in its efforts to acquire Japanese chipmaker Renesas Electronics Corp., when INCJ led a consortium of Japan companies and outbid the buyout firm.

However, back in June, INCJ said it had been in discussions with domestic and foreign private equity firms over joint investment strategies. Haruyasu Asakura, chief operating officer of INCJ, who spoke AVCJ Japan Forum earlier this year, has already said that partnerships between his fund and global buyout firms, such as KKR,could be a possibility in the future.

Also, a possible tie-up could also help assuage local concerns about foreign buyout firms acquiring controlling interests in Japan companies.

In the financial year ended March, Panasonic's healthcare business - which manufactures blood-sugar monitoring equipment and electronic medical record-keeping systems - made JPY8.7 billion ($87 million) in operating income on JPY134.3 billion in sales, giving it an operating profit margin of 6.5%.

Its parent company, meanwhile, posted combined losses of $15 billion over the last two financial years, prompting a vast restructuring effort. This has included selling off non-core assets and Advantage Partners was one of the first to capitalize by acquiring the digital camera business of Panasonic unit Sanyo Electric last December.

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• Topics
• North Asia
• Buyouts
• Healthcare
• KKR
• Japan
• buyout
• healthcare