Sony, NEC to merge optical disc subsidiaries

Posted on 28 Feb 2006 at 11:22

Japanese consumer electronics giants Sony and NEC have announced that they are to merge their optical disc businesses into a new joint venture. The new company to be known as Sony NEC Optiarc Inc will have around 350 employees and a combined turnover of 220 billion yen or just over a billion pounds.

Shares in the company will be split 55 per cent for Sony with the remainder owned by NEC.

Sony and NEC say that they hope that the joint venture will be up and running by 3 April and will spin their respective optical disc divisions out a few days prior to the merger. The company will be headed by Shinichi Yamamura, who is currently deputy president of the video business group of Sony.

The move is part of a string of announcements made by Sony that is spinning off five non-core subsidiaries as part of a restructuring begun by the company's British Chairman and CEO, Sir Howard Stringer. He is attempting to refocus the company after many considered it has lost the edge that made it the world's number one consumer electronics brand.

Interestingly the companies are on either side of the current format war between the Sony backed Blu-Ray and the Toshiba/NEC HD-DVD.

Author: Steve Malone