Toshiba and Fujitsu merge mobile phone divisions

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Fujitsu and Toshiba have signed a memorandum of understanding to merge their mobile phone businesses.

Toshiba will transfer its handset business to a new company to be established on 1 October, and Fujitsu will acquire a majority of the shares in the company under the terms of the agreement.

The companies said that they will look to become the number one provider of mobile phones in Japan, and that the merger will create a competitive advantage in developing competitive next-generation handsets for the smartphone market.

Fujitsu's proprietary technologies include mobile phone software platforms, water- and dust-resistant designs, fingerprint security and sensor technologies.

Toshiba, meanwhile, specialises in smartphone and imaging technologies, thanks to a strong background in the LCD television market.

Fujitsu and Toshiba are also looking to enhance handset development and improve business efficiency by combining these development and technological strengths, they said.

The companies plan to sign a final contract at the end of July.