The joint venture will offer sales, engineering, installation and servicing of industrial electric and automation systems for various factories, such as metal processing, paper, petrochemicals and automobiles.

The merger is scheduled for October 1 and the new firm, which will be capitalised at 35 billion yen (291.7 million dollars), will be owned equally by Toshiba Corp. and Mitsubishi Electric Corp., they said.

The two firms set a sales target for the joint venture of 160 billion yen for the year to March 2007.

"The global market outlook for industrial electric systems remains severe," with falling Japanese capital investment while global competition becomes tougher, Toshiba and Mitsubishi said in a joint statement.

"Mitsubishi Electric and Toshiba decided to integrate their businesses to enhance competitiveness and promote their presence in the overseas markets for industrial electric and automation systems," they said.

SPACE.WIRE