Tokyo - Japan's Panasonic Corp is considering buying troubled Sanyo Electric Co to become the nation's largest electronics manufacturer, news reports said Saturday.

Panasonic wants to begin negotiations with the three top shareholders of its domestic competitor as early as this month, the Nikkei business daily reported.

Should the negotiations be successful it would be the first merger between two large Japanese electronics companies.

Panasonic hopes to secure a basic agreement with the three shareholders - Sumitomo Mitsui Banking Corp, the Daiwa Securities SMBC group, and the Goldman Sachs group - by the end of the year, the reports said.

The three hold a total of nearly 430 million preferred shares in Sanyo.

Sanyo is the world's largest manufacturer of lithium-ion batteries for personnel computer and mobile phones as well as a make of solar batteries.

Acquiring Sanyo would allow Panasonic to bolster its battery operations and gain a foothold into the promising solar market, the Nikkei said. (dpa)