In a move certain to shake up the natural refrigerants market in North America and beyond, Japanese electronics giant Panasonic Corporation announced on Monday its acquisition of Hussmann Corporation, a major US manufacturer of refrigerated display cases and systems, for $1.545 billion (approximately 185.4 billion yen).
Panasonic, based in Osaka, Japan, has signed an agreement with Hussmann Parent Inc., the Delaware-based parent of Hussmann, and Clayton, Dubilier & Rice, LLC in New York, representing shareholders of Hussmann Parent. The agreement calls for Panasonic Group to acquire 100% of the shares of Hussmann Group, including Hussmann Corporation, in April 2016. Hussmann is based in Bridgeton, Missouri.
Alliance to trigger Panasonic US expansion
In a statement, Panasonic said this agreement will allow it to expand its display-case business and food-distribution-solutions business in the United States, the biggest market for refrigerated and freezer display cases, as well as countries and regions around the US – and beyond to Australia and New Zealand.
Asked what impact the acquisition would have on Hussmann's activities in North America, Quentin Crowe, associate product manager at Hussmann, told R744.com that "Panasonic is a global innovative company so it would be logical to explore available technology for strategic fits".
As part of its growth strategy, Panasonic is looking to generate sales of 300 billion yen from the food distribution solutions business. The company has been promoting its energy-efficient and environmentally-conscious refrigerated and freezer display cases for supermarkets and convenience stores – one of its main products in the food distribution solutions business – mainly in Japan, China and other parts of Asia. Meanwhile, new approaches have been sought to meet the demands of customers in the US.
"We want to make [this acquisition] a trigger to accelerate our global business," Panasonic Chief Executive Kazuhiro Tsuga is quoted by Reuters as saying at a news conference in Tokyo. "We are likely to actively pursue overseas acquisitions."
Tetsuro Homma, president (appliances) at Panasonic, said the company was well-placed to bring its food retail innovations to the US market – including natural refrigerant technology. "The big business opportunity in the US is convenience stores (CVS). In Japan, the CVS market is a very highly industrialised, expanding business model with large capital investment and major development. Going forward, there will be this kind of chance in the US. We think we can use our experiences with equipment for small-size stores in Japan."
No plans to market CO2 heat pumps through Hussmann
Asked whether Hussmann would be marketing CO2 heat pumps in the US given Panasonic's expertise with the technology, Crowe said: "Hussmann being a refrigeration company, at this time I don’t see plans to market heat pumps through Hussmann".
In 2010, Panasonic acquired Sanyo Electric and since then has continued Sanyo's expertise in CO2 refrigeration and heat pump technology. The former Sanyo had developed the world's first CO2 rotary 2-stage compression compressor. Lawson, a major convenience store retailer in Japan, employs two CO2 systems from Panasonic (a 10 HP and a 2 HP CO2 transcritical condensing unit) in many of its standard stores. In 2015, Lawson installed transcritical units in more than 600 stores, and it plans to have them in about 1,300 stores in 2016.
In September 2014, Hussmann and Systemes LMP, based in Quebec, announced an alliance to provide CO2 transcritical refrigeration systems. In October 2015, Aldi opened a store in West Seneca, N.Y., that operates the first Hussmann/LMP transcritical system in the US.
Asked what impact the acquisition by Panasonic would have on that merger, Crowe said "this merger will have no impact on our alliance with LMP. We will continue to support and grow this relationship".
US market increasingly attractive to investors
Some observers see the merger as evidence that the US market is evolving in a positive direction. Marco Caretto, head of sales at CAREL Group, described the acquisition as "a clear sign that the US market is highly attractive to investors, especially if characterised by technological and innovative solutions".
Caretto sees the deal as further confirmation that a 2012 decision by CAREL Group to strengthen its presence in the US was the right one. "It is very interesting to see how the US market is going to be considered more and more mature for high-efficiency solutions that bring energy savings and reduce GWP [global warming potential] impact," he said.
Hussmann name, brand to remain
Panasonic said the acquisition will combine Hussmann's strengths in customer relationship, maintenance and services with Panasonic's wide-ranging technology and product lineup. This will enable Panasonic to leverage core refrigeration product technology and case platforms, including its CO2 systems and foodservice products. Other synergy opportunities include LEDs, remote monitoring and other technology platforms that enhance retailers’ merchandising and consumer connectivity.
Hussmann will serve as the base of Panasonic’s food distribution business in North America and its major markets. Hussmann's current management team will stay in place to manage the acquired company under Panasonic’s guidance. The Hussmann name and brand will continue to be used.
The completion of this acquisition is subject to approval by competition authorities in the United States and other countries.
Alliance to trigger Panasonic US expansion
In a statement, Panasonic said this agreement will allow it to expand its display-case business and food-distribution-solutions business in the United States, the biggest market for refrigerated and freezer display cases, as well as countries and regions around the US – and beyond to Australia and New Zealand.
Asked what impact the acquisition would have on Hussmann's activities in North America, Quentin Crowe, associate product manager at Hussmann, told R744.com that "Panasonic is a global innovative company so it would be logical to explore available technology for strategic fits".
As part of its growth strategy, Panasonic is looking to generate sales of 300 billion yen from the food distribution solutions business. The company has been promoting its energy-efficient and environmentally-conscious refrigerated and freezer display cases for supermarkets and convenience stores – one of its main products in the food distribution solutions business – mainly in Japan, China and other parts of Asia. Meanwhile, new approaches have been sought to meet the demands of customers in the US.
"We want to make [this acquisition] a trigger to accelerate our global business," Panasonic Chief Executive Kazuhiro Tsuga is quoted by Reuters as saying at a news conference in Tokyo. "We are likely to actively pursue overseas acquisitions."
Tetsuro Homma, president (appliances) at Panasonic, said the company was well-placed to bring its food retail innovations to the US market – including natural refrigerant technology. "The big business opportunity in the US is convenience stores (CVS). In Japan, the CVS market is a very highly industrialised, expanding business model with large capital investment and major development. Going forward, there will be this kind of chance in the US. We think we can use our experiences with equipment for small-size stores in Japan."
No plans to market CO2 heat pumps through Hussmann
Asked whether Hussmann would be marketing CO2 heat pumps in the US given Panasonic's expertise with the technology, Crowe said: "Hussmann being a refrigeration company, at this time I don’t see plans to market heat pumps through Hussmann".
In 2010, Panasonic acquired Sanyo Electric and since then has continued Sanyo's expertise in CO2 refrigeration and heat pump technology. The former Sanyo had developed the world's first CO2 rotary 2-stage compression compressor. Lawson, a major convenience store retailer in Japan, employs two CO2 systems from Panasonic (a 10 HP and a 2 HP CO2 transcritical condensing unit) in many of its standard stores. In 2015, Lawson installed transcritical units in more than 600 stores, and it plans to have them in about 1,300 stores in 2016.
In September 2014, Hussmann and Systemes LMP, based in Quebec, announced an alliance to provide CO2 transcritical refrigeration systems. In October 2015, Aldi opened a store in West Seneca, N.Y., that operates the first Hussmann/LMP transcritical system in the US.
Asked what impact the acquisition by Panasonic would have on that merger, Crowe said "this merger will have no impact on our alliance with LMP. We will continue to support and grow this relationship".
US market increasingly attractive to investors
Some observers see the merger as evidence that the US market is evolving in a positive direction. Marco Caretto, head of sales at CAREL Group, described the acquisition as "a clear sign that the US market is highly attractive to investors, especially if characterised by technological and innovative solutions".
Caretto sees the deal as further confirmation that a 2012 decision by CAREL Group to strengthen its presence in the US was the right one. "It is very interesting to see how the US market is going to be considered more and more mature for high-efficiency solutions that bring energy savings and reduce GWP [global warming potential] impact," he said.
Hussmann name, brand to remain
Panasonic said the acquisition will combine Hussmann's strengths in customer relationship, maintenance and services with Panasonic's wide-ranging technology and product lineup. This will enable Panasonic to leverage core refrigeration product technology and case platforms, including its CO2 systems and foodservice products. Other synergy opportunities include LEDs, remote monitoring and other technology platforms that enhance retailers’ merchandising and consumer connectivity.
Hussmann will serve as the base of Panasonic’s food distribution business in North America and its major markets. Hussmann's current management team will stay in place to manage the acquired company under Panasonic’s guidance. The Hussmann name and brand will continue to be used.
The completion of this acquisition is subject to approval by competition authorities in the United States and other countries.
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By R744.com team (@r744)
Dec 21, 2015, 20:39
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