The consolidation process in the Japanese home electronics business goes on and on. Today former rivals Sharp and Sony said [JP] they reached a final agreement to launch an LCD panel joint venture in Osaka, after having failed to ink the deal last month. In March already, Sharp said it wants Sony as a partner for its plans to boost the production of LCD TVs.

Sharp will start operating a plant for the production of LCDs on its own in October. The subsidiary is to be turned into a joint venture by March 2010. Sony is expected to take a 34% stake and cover 34% of the $4 billion total cost. In return, the company will get some of the LCDs produced in the Sharp plant in Osaka (and another one in Southern Japan).

The deal is focused on midsize-LCD screens, particularly 32-inch models. So far, Sony bought its panels from AU Optronics in Taiwan and from a joint venture company it established with Samsung.

Sharp is also expected to merge its Blu-ray business with Pioneer’s Blu-ray division on October 1 this year. In addition, the company is in talks with Toshiba to step up the production of solar panels.