Yamada Denki, the largest discount home electronics retailer in Japan plans to acquire a majority stake in Best Denki, a smaller rival for more than Y10 billion ($126 million).
The transaction would help Yamada Denki to strengthen its leading position on the market amid fierce competition that has forced electronics companies to aggressively cut prices.
The information was not yet confirmed by Yamada Denki, which already owns a 7.5 percent stake in Best Denki.
The difficult market is forcing other players as well to seek alliances. In May consumer electronics retailer Bic Camera agreed to pay Y14 billion to acquire rival Kojima. Bic Camera which became the second retailer on the market after buying Kojima, has also a 15 percent stake in Best.
The transaction between Yamada Denki and Best could lead to the cancelling of the cooperation between Bic Camera and Best, according to Nikkei business newspaper.