UPDATE 1-Taiyo Yuden to acquire JVC's recording media unit

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TOKYO, May 26 (Reuters) - Japanese optical disk maker Taiyo Yuden Co Ltd (6976.T: Quote, Profile, Research) said on Monday it would acquire 65 percent of JVC's 6792.T recording media unit to boost its media business.

Japanese makers of optical disks -- CD-Rs and DVDs -- have been hit by steep price falls amid an onslaught of cheaper alternatives from overseas rivals and have been forced to restructure to survive.

The announcement also came as struggling electronics maker JVC is scaling back or selling non-core businesses. The firm, formally called Victor Co of Japan Ltd, is due to merge with rival Kenwood Corp 6765.T under a holding company on Oct. 1.

JVC said it would spin off its recording media business, which makes magnetic videotapes and optical disks, on July 1 and Taiyo Yuden would acquire a majority in the new company on Oct 1.

Taiyo Yuden said the terms of the deal would be decided based on the value of the business at the end of September. It said it would keep the JVC brand after it acquires the new company.

"We have determined it is best to fuse our technology and production know-how of recording media with JVC's brand power, technology and know-how," Taiyo Yuden said in a statement. The two companies said the new company would keep JVC's production base of magnetic media but would switch to Taiyo Yuden for the supply of optical disks.

The move is the latest example of consolidation and restructuring in the optical disk industry, as makers try to survive tough competition.

Last year, TDK Corp (6762.T: Quote, Profile, Research), then the world's No.2 brand in optical disks, sold its brand and sales operations in recording media to U.S. recording disk and tape maker Imation Corp (IMN.N: Quote, Profile, Research).

Hitachi Maxell Ltd (6810.T: Quote, Profile, Research) terminated production of optical media in March and switched to outsourcing. (Reporting by Taiga Uranaka, Editing by Michael Watson)