June 24, 2007	Sunday	Jamadi-us-Sani 08, 1428

TOKYO, June 23: Struggling electronics maker Victor Co. of Japan (JVC) has agreed to integrate with another Japanese high-tech firm Kenwood Corp. and create a new holding company in 2008, a press report said on Saturday.

JVC had informed its parent firm Matsushita Electric Industrial Co. that it would agree to a proposed merger with Kenwood, a leading manufacturer of car navigation systems and wireless equipment, business daily Nikkei reported.

The three companies would aim to reach a final agreement by the end of next month, the report said.

The alliance appears complimentary as JVC focuses mainly on television and audio equipment, meaning its business does not overlap with Kenwood's.

JVC pioneered VHS video recorders a generation ago but has struggled in recent years in an increasingly competitive market.

According to the Nikkei report, under the plan Kenwood will buy new JVC shares worth some 20 billion yen ($170 million) in the coming months to hold a 13 per cent stake in JVC.

Matsushita will sell a portion of its 52.7 per cent interest in JVC to Kenwood's top shareholder, investment firm Sparx Group Co, it said.

Once JVC and Kenwood had merged to form the new holding company, Matsushita will sell the remainder of its JVC shares to the holding company to complete the transaction, the report said.—AFP