Tokyo, June 5 (Jiji Press)--Japanese home electronics retailers Yamada Holdings Co. and Edion Corp. said Friday that they have reached a basic agreement to integrate their operations with combined annual sales of 2.5 trillion yen. They plan to establish a holding company and become wholly owned subsidiaries of the new entity. Edion Chairman Masataka Kubo is set to become president of the holding company, while Yamada Holdings Chairman Noboru Yamada will become chairman. Yamada Holdings and Edion, which plan to carry out the integration Oct. 1, 2027, have a total of some 36,000 employees and over 9,900 stores including franchise outlets. Yamada Holdings, whose core subsidiary is Yamada Denki Co., is already the industry's top player. The integration would create an even bigger group far ahead of competitors including second-biggest Nojima Corp. The two companies hope to leverage the economies of scale to reduce procurement costs and develop competitive private-brand products. They will also explore ways to mutually utilize their customer bases and expand their business areas through merger and acquisition deals. The Japanese home electronics market has reached a plateau due to demographic factors, while competition has intensified with the rise of online shopping and the entry of companies from other industries. In addition, the business environment is changing drastically amid an increase in electronics products made overseas and developed by companies other than electronics manufacturers. Against the background, home electronics retailers face the increasing need to reassess their strategies. END [Copyright The Jiji Press, Ltd.]