Panasonic Corp. (OTC:PCRFF), the Japanese electronics firm, is expected to acquire Blue Yonder, a leader in U.S. supply chain software, for $6.45 billion, according to a report by Nikkei Asia. This would be Panasonic’s biggest acquisition since 2011, when it spent $7.3 billion to wholly own Sanyo Electric and Panasonic Electric Works.
The Japanese company acquired a 20% stake in Blue Yonder in 2020 for approximately $790 million. Reuters reports that Panasonic will acquire the rest of the stock from shareholders, Blackstone Group and New Mountain Capital.
“This is not something that has been announced by our company. It is not true that it is something we have decided,” Panasonic said in an emailed statement to Reuters.
Panasonic’s business model has traditionally focused on selling electronic goods but has recently made pivots to expand into hardware that combines software, sensors and other devices to improve operational inefficiencies. It hopes to follow the recurring revenue model of its competitor, Sony, which uses Hitachi’s platform for gaming.
The Japanese company is leveraging its logistics facility hardware, like security cameras and bar code readers, with Blue Yonder’s artificial intelligence software that can predict product demand and audit supply chains for inefficiencies.
In 2019, the global market for this type of software was around $15 billion; it is expected to grow 10% annually, reported Nikkei Asia.
“I am excited about this collaboration to realize our joint vision for digital supply chain — where Blue Yonder’s platform synchronizes with Panasonic’s edge offerings to deliver more autonomous, successful business outcomes for retailers, manufacturers and logistics providers,” said Girish Rishi, CEO of Blue Yonder, in a statement regarding Panasonic’s equity investment in May.
Panasonic has implemented this operational strategy by incorporating several Blue Yonder Luminate Planning solutions into Panasonic’s Mobile Solutions Business Division (MSBD) in November. This integration has allowed MSBD to increase accuracy of its global supply chain, which has previously relied on labor-intensive coordination between regions.
Panasonic will not limit its transformation to just supply chains. The company plans to develop a system to centrally manage home appliances and household equipment. In July, it appointed former Google (NASDAQ:GOOGL) executive Yoky Matsuoka to apply her experience at Google’s Nest smart-home unit to the company’s offerings. Since then, the company unveiled Nikobo in February, Panasonic’s first household robot, which uses facial recognition to interact with its owner.