Sony and NEC signed a definitive agreement on Monday to combine their optical disc drive businesses into a single company.

The new company, Sony NEC Optiarc, will start business on April 3 and will be headed by Shinichi Yamamura, who is currently deputy president of Sony's video business group.

Sony will own 55 per cent of the new company and NEC will hold the remaining 45 per cent stake, the two companies said in a statement. A memorandum of understanding towards Monday's definitive agreement was signed in November last year and there are no major changes from that.

Sony NEC Optiarc will handle the optical drive businesses of both companies, including manufacturing, marketing and sales of drives for the Sony-backed Blu-ray Disc technology and NEC-backed HD-DVD technology. It will also handle development and engineering of optical drives, the companies said.

The merger will take advantage of complementary technologies: NEC has expertise in optical-disc LSI (large scale integrated circuit) chip technology while Sony is strong in optical pick-ups. Both companies are already major manufacturers of optical disc drives.