Japanese electronics makers Sharp Corp and Sony Corp will likely finalize a deal by July-end to form a television LCD panel joint venture in Sakai, Mie Prefecture, the Nikkei business daily said without citing sources.

The agreement which was scheduled to be finalized last month was postponed due to the economic downturn, the Nikkei said.

A subsidiary established by Sharp in April to manage the operation of a plant in Sakai will be converted into a joint venture by March next year, with Sony taking a 34 percent stake in it.

The Sakai plant will be the world's first LCD panel production facility capable of handling 10th-generation glass substrates. Using the largest glass substrates available today is expected to enable the plant to operate highly efficiently, the paper said.

The two partners are likely to split the total cost worth 380 billion yen ($3.99 billion) according to their stakes in the joint venture, the paper added.

On July 9, the world's fourth-largest LCD TV maker Sharp had said it planned to boost production capacity by 11 percent at its flagship LCD panel factory in Japan to meet growing demand from other flat TV makers.

($1=95.18 Yen)

(Reporting by Koustav Samanta in Bangalore; Editing by Aradhana Aravindan)

Japan Electronics Sony