Sony and Olympus form alliance

<p>Sony and Olympus are to form an alliance while the camera maker continues to reel after its accounting scandal.</p>

Sony has agreed to invest 50 billion yen (£397 million) in struggling camera manufacturer Olympus.

The Japanese technology juggernaut will take an 11.5 per cent stake in Olympus in return for the investment and the two businesses will also set up a company together later this year, which will be 51 per cent-owned by Sony, in order to work on developing new business.

Olympus is still in difficulty after its accounting scandal – which covered up £1 billion in losses.

In addition to making cameras, Olympus also produces medical paraphernalia and the new company will concentrate on manufacturing a range of new devices for the sector with the help of its new business partner.

Sony president Kazuo Hirai said of the venture: "I will do my best to make this meaningful and profitable for both Olympus and Sony."

At 16:40 BST, Sony was 3.2 per cent lower on the New York Stock Exchange to $11.73 per share.

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