Japanese mid-sized electronics makers JVC and Kenwood Corporation have agreed to integrate their businesses under a holding company in October, sources close to the matter said.

Kenwood and asset manager Sparx Group acquired a combined 30 per cent stake in loss-making JVC for 35 billion yen ($340 million) last year, and Kenwood and JVC have been in talks with eyes on merging their operations under a holding company.

Victor Company of Japan Limited president Kunihiko Sato is set to become president of the holding company and Kenwood chairman Haruo Kawahara is slated to become chairman of the new organisation, the sources said.

JVC last month posted a net loss for the fourth straight year due to fierce price competition, while Kenwood is scheduled to report its earnings results for the year ended March 31 later in the day.