Japanese electronics company and Tesla Inc TSLA battery supplier Panasonic Corp. PCRFY are reportedly in advanced talks to make a big-ticket acquisition.
What Happened: Panasonic is negotiating a deal to buy U.S.-based supply chain management software provider Blue Yonder for about $6.5 billion, Nikkei reported Monday, citing multiple sources familiar with the matter.
Incidentally, Panasonic had made an equity investment in Blue Yonder in May 2019, with the stake acquired through subscription to a secondary offering. This gave Panasonic a 20% equity interest and a board seat at Blue Yonder.
"The move marks a major change in the business model of the manufacturing industry, which until now has been based on selling goods," the Nikkei report said.
Why It's Important: Blue Yonder's machine learning-driven digital fulfillment platform enables clients to deliver to customers when, how and where they want it.
The company empowers more than 3,300 manufacturers, retailers and logistics companies to create more autonomous, sustainable and profitable operations. Its clientele includes several big names such as Walmart Inc. WMT and Unilever PLC UL.
The remaining 80% stake in Blue Yonder is held by The Blackstone Group Inc. BX and New Mountain Capital.
"Panasonic hopes to leverage its hardware operations by combining them with software," the Nikkei report said.
Combining software to its security cameras used in stores and portable bar code readers used in logistics facilities will increase the value of Panasonic's hardware product offerings, the report said. It will also help the company transition to a recurring revenue business model.
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