OSAKA, Oct. 20, 2009 (Kyodo News International) -- Kansai Electric Power (OOTC:KAEPY) Co. plans to acquire a controlling stake in a real estate development firm that is the successor of the now-defunct Matsushita Investment & Development Co., known for its close ties to the founder of Panasonic Corp. (NYSE:PC) , Konosuke Matsushita, sources familiar with the deal said Tuesday.

KEPCO envisions buying some 80 percent of the shares in the struggling Osaka-based developer, MID Urban Development Co., from U.S. investment fund Ethos Japan by the year-end, the sources said.

MID Urban incurred a net loss of 11.4 billion yen in the business year ended March 31 due to the flagging real estate market.

KEPCO, which has been diversifying into the housing sales business, wants to expand sales of its houses, whose heating and kitchen facilities are dependent on electric energy, on the strength of the MID Urban acquisition, they said.

Ethos Japan became a key shareholder in MID Urban in 2005 after the developer sank into business trouble due to investments in resort properties at home and abroad during the asset-inflated bubble economy era in the late 1980s and the early 1990s.

Both Panasonic and its founding family have already pulled their investments out of MID Urban, which posted sales of 28.6 billion yen in fiscal 2008 through its office building and condominium development business.