Japan's Sanyo Electric and Seiko Epson Corp won permission from the European Commission (EC) to merge their liquid crystal display (LCD) operations.
"Although the agreement will create one of the world's leading suppliers of (LCD) screens, the joint venture will face competition from other worldwide players," the EC said in a statement.
The companies plan to carry out the merger in October, creating a firm with combined sales of about 360 billion yen (approx. U.S. $3.37 billion) by developing, producing, and selling the small- and medium-sized LCDs used in mobile phones, digital cameras, and cars.
The new company, Sanyo Epson Imaging Devices Corp., will rank fourth in the market for small- to mid-sized LCDs -- screen diagonals of less than 10 in (25.4 cm) -- trailing Samsung Electronics Co Ltd., LG Philips, and Sharp Corp.
"By combining our technological prowess, manufacturing ability and focusing on small- and mid-sized displays, we won't take a backseat to anyone," Seiko Epson President Saburo Kusama said at March news conference announcing the deal.
Seiko Epson is said to be the world's top maker of LCDs for mobile phones and focuses mainly on low-cost, high-volume corners of the market, while Sanyo specializes in more up-and-coming segments such as displays for digital still and video cameras.
Printer giant Seiko Epson will consolidate the new company by holding a 55-percent stake, and Sanyo will hold the remaining 45 percent.
Sanyo and Seiko expect the market for mobile phone displays to reach 440 million units in 2005, compared with 280 million units in 2003. LCD units for digital camera monitors are expected to hit 70 million in 2005 from 50 million units now.
The agreement does not include either company's organic light-emitting diode (OLED) operations. (Reuters)
to Daily News