Pioneer to Buy NEC's Plasma Business

Pioneer Corp. said it intends to purchase NEC's plasma business, a deal that will make it the world's largest plasma display maker, with an annual output of more than 1 million units by 2005.

The two companies signed a memo of understanding that NEC will transfer all shares of the NEC Plasma Display Corp. unit and all related intellectual property to Pioneer. Deal terms were not disclosed by either company, but published reports in Japan pegged the transaction at around 40 billion yen, or $380 million. Pioneer said it planned to complete the purchase by March.

Pioneer already turns out about 250,000 units a year. It previously considered building an additional plant before the NEC deal materialized. The NEC plasma unit has around 1,100 employees and about $472 million in sales. NEC's OEM customers include Sony Corp., one of Pioneer's major competitors in the plasma TV market. Pioneer said it would continue the OEM operation after the deal and maintain the relationship with Sony.

NEC will focus on IT and semiconductors.