Sanmina Corp. said it will spend $6 billion to acquire SCI Systems, a rival contract electronics manufacturer, in a stock deal that includes the assumption of $1.5 billion in SCI debt. The deal would create a company with more than $14 billion in annual revenues that rivals Flextronics International and industry leader Solectron Corp. in the $100-billion-a-year business of outsourced electronics manufacturing. Sanmina is based in San Jose, Calif.; SCI Systems in Huntsville, Ala.
The maker of Panasonic-brand electronics has "4,000 to 5,000 employees too many" and will step up payroll cuts, reports said. Japan's Matsushita Electric Industrial Co. is expected to report its first quarterly loss, probably in the range of $160 million, due to such factors as an overall slump in electronics sales, a lack of products with star appeal, the bloated work force, and a conservative corporate culture. For most of the past decade, Matsushita has lagged behind rival Sony in sales of almost every consumer electronics product, from video game machines to digital cameras.
(c) Copyright 2001. The Christian Science Monitor