Konica Corp. and Minolta Corp. plan to merge operations, resulting in the elimination of some 4,000 jobs as part of an effort to compete with rivals such as Canon Inc., Fuji Photo Film Co. Ltd. and Ricoh Co., Dow Jones Business News reported.

  The two Japanese camera and copier manufacturers announced their plans today, saying they expect the consolidation to cut costs by ¥50 billion ($ 419.6 million) a year. Monetary terms of the merger deal weren't disclosed. The new entity aims for sales of ¥1.3 trillion and operating profit of ¥150 billion in the year ending March 2006.

  The two will reduce their combined work force by 4,000, or about 10 percent, by 2005 from about 38,500 currently, the report said.

  Under terms of the agreement, Konica will transform into a holding company structure in April, and Minolta will join that structure via a share swap in August. The swap ratio will be decided Jan. 16. The two companies will reorganize their operations in October under the joint holding company.

  Konica President Fumio Iwai will be president of the joint holding company and Minolta President Yoshikatsu Ohta will become vice president.

  The two companies will use the Konica brand for sales of film and the Minolta brand for cameras. Konica and Minolta already have ties in the area of research and development of copiers.

  Their combined sales currently lag well behind those of Canon and Ricoh, the report said. Canon had sales of nearly ¥3 trillion yen for the business year ended December 2001. For the business year ended March 2002, Konica posted group sales of ¥539.57 billion, while Minolta recorded sales of ¥510.86 billion.

  The markets were wary about the merger and analysts, while applauding the move to cut costs and consolidate, raised doubts over whether the combination could boost their fortunes against bigger rivals in printers, copiers and digital cameras, Reuters reported.

  "There are probably some synergies... but not as neatly as it might sound," said Merrill Lynch analyst Richard Kaye.

  Said Hideo Ueki, chief investment officer at UBS Asset Management, "Industry consolidation will give more bargaining power to suppliers who survive it. In that context, this is positive."