TOKYO (AP) -- Panasonic's Sanyo Electric Co. signed a $366 million deal to sell its chip unit to ON Semiconductor Corp., allowing the U.S. manufacturer to expand its business in the Japanese market, the companies said Thursday.
Under the agreement, ON acquires Sanyo's chip subsidiary Sanyo Semiconductor Co. and assets related to its semiconductor business in a cash and stock transaction, the two companies said a joint statement.
ON President and CEO Keith Jackson said the union of the two companies will enhance ON's presence in the automotive and consumer markets in the Asia-Pacific region.
"Strategically, this acquisition is expected to provide us with increased access to an important part of the global semiconductor market, the Japanese market," he said.
Sanyo Electric is expected to receive about $129 million in cash and the balance in ON Semiconductor common stock, about 7 to 8 percent of ON Semiconductor's shares outstanding.
The two companies said they expect to complete the transaction by the end of this year.
ON has a factory in northern Fukushima prefecture (state) in Japan, one of six factories in Asia. The company also has design centers in China, Taiwan, South Korea and India.
Sanyo Electric Co. became a subsidiary of bigger Japanese rival Panasonic Corp. after a $9 billion takeover last year, creating one of the world's biggest electronics companies.
But part of Sanyo's semiconductor operation overlapped Panasonic's own operation and became subject to restructuring.