(Reuters) - Japan's Toshiba Corp and Sony Corp are in final stages of talks to combine their small LCD panel units, to create a possible new global market leader, the Nikkei business daily reported.
Government-backed investment fund Innovation Network Corp of Japan will invest about 100 billion yen ($1.24 billion) to own 70-80 percent of the merged entity, Nikkei said citing sources.
Toshiba Mobile Display Co had 9.2 percent of the global small LCD panel market in 2010, while Sony Mobile Display Corp had 6.1 percent. Sharp Corp led the lot with a 14.8 percent market share, the newspaper said.
The new company may use the funds to introduce cutting-edge production lines at a Sony plant in Aichi Prefecture's Higashiura, the Nikkei reported.
It will also develop technologies to mass-produce OEL (organic electroluminescence) panels, which deliver higher resolutions than LCD panels while consuming less power, the business daily said.
Toshiba and Sony are seeking a basic agreement this month and the entity is expected to form this year, the paper said.
($1 = 80.280 Japanese Yen)
(Reporting by Arpita Mukherjee in Bangalore; Editing by Joyjeet Das)