Japanese electronics manufacturer Sanyo said Monday that it has agreed to sell its troubled mobile handset unit to local rival Kyocera for around Y40bn (Eur260m).

Sanyo’s mobile phone unit focuses primarily on CDMA technology, but also includes a portfolio of PHS and base station platforms.

The merger, set to happen on April 1, will bolster Kyocera’s global operations and, to a lesser degree, market share, putting the Japanese company in sixth place, far behind its closest competing handset vendor, LG Electronics.

The electronics firm hopes the move will give Kyocera a stronger foothold in the North American CDMA market. Under the deal, Kyocera will take on the 2,000 employees in Sanyo’s mobile phone business and will also have access to the Sanyo brand.

A sale of the mobile unit has been on the cards since October, with Sanyo revealing that, “the business operating environment surrounding the mobile phone business has changed, receiving intensified competition from rival companies.”

In mid-2006, Sanyo called off much vaunted joint venture to create new CDMA devices with Nokia, after the Finnish firm wound down its own CDMA research and development business.