Acquiring Panasonic's lead-acid battery business and subsidiarising Panasonic Storage Battery (2015)

The side that exits, and the side that takes it on

Buying up a competitor's business in a market with no growth ahead of it may sound like a contrarian play. But the core of this acquisition was a decision to hold lead-acid again as a business to be defended rather than one to be discarded. Where Panasonic, professing concentration on growth fields, withdrew from a mature market, GS Yuasa spent $147M (¥16bn) to take the whole of it — Japan, Shenyang, India, Thailand — acquiring 85.1% of the shares and folding it into the group as GS Yuasa Energy. One party read the same mature market as something to be wound down, the other as something to be gathered up and held; that is where the character of the transaction lies.

That said, having bought further into a market it had itself described as having no growth, the return depended on how efficiently it could run lead-acid. GS Yuasa had made the two domestic rivals into one, spread locally-supplied plants overseas, and now drew in the Panasonic operations as well, pulling the business of lead-acid batteries toward itself. Consolidation reduces duplicated supply; how far a mature core business can be turned into earning power was the question left to the running of it afterwards. The difference between the side that exits and the side that takes on is also a difference in how the same market is appraised.