Increasing competition in the market is behind the plan TOKYO — Toshiba Corp. and Samsung Electronics Co. Ltd. have reached a basic agreement to combine their respective optical disc drive businesses into a joint venture company, Toshiba said Monday.A memorandum of terms regarding the proposed deal was signed earlier in the day and the two companies will now work on the finer details of the merger, Toshiba said in a statement. The proposed joint venture will be 51 percent owned by Toshiba and headquartered in Tokyo, with a wholly owned subsidiary in South Korea.To date, the two companies have agreed to include their CD-ROM and DVD-ROM product and business planning, product development, procurement, and sales operations in the company. Whether to include the respective manufacturing operations is one of the areas still to be decided upon, said Keisuke Ohmori, a spokesman for Toshiba in Tokyo. Increasing competition in the optical disc drive market is behind the plan.“Business is becoming more and more competitive and convergence is occurring,” Ohmori said, citing the Hitachi LG Data Storage Inc. joint venture between Hitachi Ltd. and LG Electronics Inc., and the JVC Lite-On IT Manufacturing Ltd. joint venture between Victor Co. of Japan Ltd. (JVC) and Taiwan’s Lite-On Technology Corp.“Toshiba and Samsung will work together to be the leading maker and aim for the world number one position,” he said. Should the two companies combine their businesses as planned, Ohmori said the companies estimate they would be neck-and-neck with Hitachi LG in terms of sales. The two companies hope to finalize their discussions and reach a definitive agreement during the current fiscal year, said Ohmori. The fiscal year ends on March 31, 2004.