TOKYO (AP) -- Home electronics suppliers Victor Co. of Japan and Kenwood Corp. said Monday they have agreed to set up a joint holding company effective Oct. 1.
The move is the latest stage of a long-running merger plan that underscores the pressure for consolidation as competition intensifies among Japan's crowded field of small to mid-size consumer device makers.
In a statement, Victor, best known for its JVC brand of home electronics goods, and Kenwood, famous for its car audio systems, set share swap terms for the merger, first agreed in principle last summer. The new company will be called JVC Kenwood Holdings.
Under terms of the deal, Victor holders will have the right to two shares in the new holding structure for each Victor share owned, while Kenwood investors will qualify for one share in the new company for each Kenwood share owned.
The agreement was disclosed after the close of trading on the Tokyo Stock Exchange.
Victor ended up 7.5 percent at 285 yen ($2.75), while Kenwood finished 3.1 percent higher at 133 yen ($1.28). At the latest market prices, Victor and Kenwood have a combined market capitalization of just more than 150 billion yen ($1.44 billion).
