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EU lets Sony, NEC set up ODD venture

The European Commission cleared Sony and NEC to set up an optical disc-drive joint venture. EU regulators said the deal would not significantly change competition in optical disc-drive markets as the new venture would face strong rivals such as Hitachi LG, Toshiba Samsung, Pioneer, Panasonic and others.

The EU has to approve mergers and acquisitions between companies with joint global revenue of more than €5 billion a year or if at least two of the companies involved each have more than €250 million revenue in Europe.

Both Sony and NEC will transfer their ODD businesses to the joint venture. Under a memorandum of understanding, signed in November, the new joint company is 55-percent owned by Sony and the remaining 45 percent by NEC.

One possible problem, however, it that Sony and NEC support different, rival formats for next-generation DVDs. Sony is promoting the Blu-ray Disc while NEC is backing the HD DVD format it and Toshiba jointly developed. The two formats are incompatible.

Story filed 03.04.06

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