World’s largest maker of plasma televisions, Matsushita Electric Industrial Co., Canon Inc. and Hitachi Ltd have agreed to team up to promote liquid crystal display (LCD) panel business. The three firms "reached a basic agreement on a comprehensive alliance” aimed at reinforcing and growing the liquid crystal display panel business and technologies. The details of the joint venture will be decided later as per the official statement.

Under the pact, Matsushita and Canon will each take a 24.9 percent stake in Hitachi Displays, a wholly owned unit of Hitachi that makes liquid crystal displays and is developing a new type of display using organic light-emitting diode (OLED) technology. After the deal Hitachi's stake in Hitachi Displays will fall to 50.2 per cent.

Through Hitachi Displays, the three companies will jointly develop and manufacture OEL (organic electroluminescence) panels, used in cell phones and flat TVs. The tie-up will also promote the development of organic light-emitting display (OLED) panels.

The three companies also plan to invest 300 billion yen to build a new factory to make small and midsized liquid crystal display (LCD) panels.

Separately, Matsushita and Hitachi also agreed to a deal in which the Osaka-based Matsushita, will hold a majority stake in IPS Alpha Technology Ltd, a manufacturer of large-size LCDs jointly owned by Hitachi Displays, Matsushita and Toshiba Corp. At Present, Hitachi is the largest shareholder in IPS Alpha with a 50% stake, followed by Matsushita's 30% and Toshiba Corp.'s 15%.
Mitsuhiro Osawa, Analyst of Mizuho Investors Securities said, “The deal will allow Matsushita hedge its risk in the flat TV market and expand the product line thus, Matsushita can deal more flexibly with changes in the market trend.”