TOKYO (AP) -- TDK Corp. will acquire German electronic-component maker Epcos AG for about euro1.2 billion ($1.4 billion), the Japanese electronics maker said Thursday.
TDK will start a public tender offer for all outstanding shares of Epcos at euro17.85 per share, TDK said, in a move aimed at strengthening its electronic components business.
The planned acquisition still requires regularly approval in Germany, it said.
Upon completion of the public tender, TDK will combine its components business with Epcos' and set up a new company, tentatively called TDK EP Components KK. The plan is subject to approval by TDK shareholders, the company said.
Japan's electronics manufacturers once dominated in products from computers to portable music players, but now often lag behind rivals in the U.S. and Asia. For the advanced electronic parts that go into such products, however, Japanese firms such as TDK and chief rival Kyocera Corp. remain among the world's leaders.
TDK's acquisition of Epcos would allow it to expand its business, Japan's Nikkei business daily reported in its Thursday's editions.
The Japanese company is strong in Asia, selling parts for personal electronics such as the magnetic readers that read and write data inside hard disk drives. Epcos is focused more on Europe and is stronger in parts for cars and industrial manufacturing.
TDK now owns 2.5 percent of Epcos and has secured delivery of an additional 7 percent.
TDK shares slid 1.5 percent to 6,500 yen ($61). The deal was announced after trading closed, but The Nikkei report came before trading opened.