Panasonic has announced plans to purchase software company Blue Yonder for $7.1 billion.

The manufacturer already owns 20 per cent of the supply chain software company and will buy the remaining shares for $5.5 billion.

The total payment includes outstanding debt and additional investments worth $1.6 billion, which means Blue Yonder’s total value is set at $8.5 billion.

Panasonic said that the acquisition strengthens its autonomous supply chain mission, which aims to support customers in optimising their supply chains by using AI, machine learning, IoT, and edge devices.

The company announced that next April, it plans to shift to a holding company system which will concentrate management resources on strategic businesses in key areas like providing supply chain innovation and automation.

Panasonic’s Connected Solutions Company will become Panasonic Connect in 2022.

“By merging the two companies, we would like to realise a world where waste is autonomously eliminated from all supply chain operations and the cycle of sustainable improvement continues,” said Yuki Kusumi, chief executive, Panasonic. “There are still many such losses and stagnation in supply chain operations, so through the drastic reduction of wasted labor and resources, we would like to provide better ways of working, and contribute to customers’ management reform and also to the realisation of a sustainable society by carefully using limited global resources. I am confident that by combining the power of Blue Yonder and Panasonic, we can create innovation in global supply chains.”

Chief executive of Blue Yonder, Girish Rishi, said that the association between the two companies came about as a result of three years of working together, first with Panasonic as a Blue Yonder customer and thereafter as joint venture partner.

“We have developed mutual trust and have a shared vision for an Autonomous Supply Chain that delivers a better life and a better world,” said Rishi. “As the essential platform for essential times, we are relentlessly focused in fulfilling our customers’ potential.”

The deal, which has been approved by the boards of directors for both companies, is likely to close in the second half of the year.

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