Three major home center operators said Monday they will merge their operations under a joint holding company Sept. 1, 2006, to create Japan's largest home center group.

The three firms -- Homac Corp., based in Sapporo, Kahma Co. in Kariya, Aichi Prefecture, and Daiki Co. in Matsuyama, Ehime Prefecture -- will set up DCM Japan Holdings Co. in Minato Ward, Tokyo, and will become wholly owned subsidiaries of the holding company.

Combined group sales of the three are estimated to total 433 billion yen in fiscal 2005 through next March, surpassing those of industry leader Cainz Corp.

Homac Chairman and President Katsutoshi Maeda will become the president of the holding company and the presidents of Kahma and Daiki will serve as vice presidents.

The three firms' stocks, listed on the first section of the Tokyo Stock Exchange and regional stock exchanges, will be delisted Aug. 28, 2006, and the new holding company's stock will go public that Sept. 1, they said. The stock exchange ratio has yet to be decided.

"We will extend our business tentacles to overseas markets, with an eye on posting sales of 1 trillion yen," Maeda told a news conference.

At present, the three companies have a total of 524 outlets, including those of business allies, in 37 of the 47 prefectures.

The new company will follow a strategy of opening new outlets in Kyushu and other areas where they presently do not have business bases.

The brand names of the three firms' outlets will remain the same even after the holding company is established, they said.

The merger is an extension of the firms' capital alliance in February 2003 and the creation of a joint venture, DCM Japan Co., in May 2003 to cooperate in development and procurement of products.

The three firms said the joint venture's products were well received by customers, and its products now account for about 25 percent of their total products.