Lite-on IT, a major manufacturer of optical disc drives, said it will acquire a car CD and DVD drive plant in Hungary from the Dutch electronics giant Phillips.

Royal Philips Electronics will sell the manufacturing operations of the Philips Automotive Playback Modules (APM) business to Lite-On IT. The business would now be transferred to a joint-venture between the two companies that will operate under the name Philips & Lite-On Digital Solutions, or PLDS.

Philips said in a statement that the sale represents another step the company is taking to focus on its Healthcare, Lifestyle and Technology activities supported by the strength of the Philips brand.

In PLDS, Lite-On will replace BenQ Corporation of Taiwan as partner in a joint venture now operating under the name Philips & BenQ Digital Storage (PBDS). Lite-On IT will pay $55-56 million for Philips' car CD/DVD manufacturing operations which are located in the city of Győr, and employ about 1,600 people. In addition, the Taiwanese firm will pay $7.96 million to Taiwan's BenQ for a 49% stake in a joint venture with Philips which was established to develop, market and sell the devices. Both companies expect the transaction to be closed in March.

PLDS will continue to develop, market and sell products to store digital information such as DVD burners and optical drives for the automotive market, with manufacturing outsourced to Lite-On IT and third parties.