The three companies announced the plan at a joint conference. Their collaboration creates a third major force in flat-panel industry in Japan along with Sony’s alliance with South Korea’s Samsung Electronics and Sharp and Toshiba team, announced last week. “The three companies will merge their strengths to accelerate development of cutting-edge display technologies and expand their scope of application.”

Sprawling portfolio

The alliance is expected to help Hitachi restructure its sprawling portfolio of subsidiary companies and enable Matsushita and Canon to raise their profile in the LCD sector.

Hitachi Ltd will reduce its interest in wholly owned subsidiary Hitachi Displays Ltd to slightly more than 50 per cent. The unit has been posting losses.

The remaining shares will be divided equally between Matsushita and Canon by March 31, 2008, according to a statement. Canon may eventually take over a majority stake in Hitachi Displays, it said.

Hitachi Displays makes small and mid-sized LCD panels and the tie-up will allow Canon to procure a steady supply of monitors for digital cameras. Canon Inc also plans to promote development of organic light-emitting diode panels, or OLEDs, with Hitachi.