Japan's Panasonic Corp's <6752.T> purchase of Sanyo Electric <6764.T> is set to boost profits more than expected as they now plan additional cost savings by merging their accounting systems and procuring materials together, the Nikkei business daily said.

Panasonic, the world's largest plasma TV maker, now expects an operating profit boost in the year beginning April 2012 of 100 billion yen ($1.1 billion), 20 billion yen more than its initial estimate, it said.

This number could be bigger if the consolidation of manufacturing sites for household appliances proceeds well, it added.

Panasonic in December acquired a majority stake in Sanyo, the world's largest rechargeable battery maker.

A Panasonic spokesman said officials from the two companies are still discussing specific steps to create synergies, and it is too early to update its previously projected profit-boosting effect.

Panasonic is set to announce a business strategy plan including the integration of the two companies' operations in early May, when it releases its annual earnings results.

With Sanyo offering solar cells as well as lithium-ion batteries, and Panasonic making fuel cells, the new Panasonic group is well positioned to take advantage of growing demand for renewable energy-related products and services.

Shares in Panasonic rose 0.2 percent to 1,433 yen, underperforming the Tokyo stock market's electrical machinery index <.IELEC.T>, which gained 1 percent.

(Reporting by Bijoy Koyitty in Bangalore and Kiyoshi Takenaka in Tokyo; Editing by Edwina Gibbs)

Japan Nikkei 225 Manufacturing