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Jim Reilly (U.S.)
(Tel: +1-201-392-6067)        Hiroko Carvell (Europe)
                              Panasonic Finance (Europe) plc 
Anne Guennewig (Europe)       (Tel: +44-20-7562-4400)
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Panasonic to Absorb Wholly-Owned Subsidiary

Osaka, Japan, December 19, 2008 - Panasonic Corporation (Panasonic [NYSE symbol: PC]) today announced that its Board of Directors has decided that Panasonic will absorb Panasonic Semiconductor Device Solutions Co., Ltd. (PSCDS), a wholly-owned subsidiary of Panasonic. The merger is expected to take effect on April 1, 2009.

Details of the merger are outlined below.

1. Purpose of merger

Under the three-year mid-term management plan GP3, starting from fiscal 2008, Panasonic aims for achieving global excellence by accelerating growth strategies and implementing initiatives for innovating management quality, based on the concept of "steady growth with profitability."

With the aim of enhancing the automobile camera business, in which the market is expected to grow, Panasonic will absorb PSCDS, which undertakes the camera module business.

Through this merger, Panasonic will realize the vertically integrated business model from semiconductors such as image sensors to camera modules and utilize its semiconductor process and mounting technologies in camera modules, thereby strengthening the company's cost competitiveness. As management reforms, Panasonic will aim to reduce duplication of work and improve efficiency by unifying its indirect operations, and proactively promote broad exchanges of personnel and human resources development. This will ensure that Panasonic enhances its global competitiveness in the automobile camera business and accelerate its growth strategies.

2. Details of merger

(1) Merger schedule

(2) Method of merger

(3) Treatment of stock acquisition rights and convertible bonds of the expiring company

3. Basic information of Panasonic and PSCDS

Notes:

1. Amounts less than one million yen have been rounded to the nearest whole million yen amount.
2. As of October 1, 2008, the company changed its name from "Matsushita Electric Industrial Co., Ltd." to "Panasonic Corporation."

4. Effects of merger on the company's financial results

Disclaimer Regarding Forward-Looking Statements

This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Panasonic and its Group companies (the Panasonic Group). To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Panasonic Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Panasonic Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Panasonic undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Panasonic in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Panasonic Group operates businesses, or in which assets and liabilities of the Panasonic Group are denominated; the ability of the Panasonic Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the possibility of not achieving expected results on the alliances or mergers and acquisitions; the ability of the Panasonic Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Panasonic Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Panasonic Group; the possibility that the Panasonic Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Panasonic Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes and other events that may negatively impact business activities of the Panasonic Group. The factors listed above are not all-inclusive and further information is contained in Panasonic's latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.