NEC is negotiating to take an equity stake of more than 50 percent in a joint venture called Casio Hitachi Mobile Communications Co., which was founded in 2004 by Casio and Hitachi, according to the sources. Casio has a 51 percent stake in the joint firm and Hitachi the remainder.
The three companies could reduce development and procurement costs, while Japan's domestic sales of mobile phone fell sharply.
The merger could create the second largest handset maker in Japan, with a combined share of more than 20 percent in the Japanese mobile phone market. Sharp Corp (TYO:6753) is the biggest mobile phone market in the country with 23 per cent market share.
Casio Computer Co Ltd