NEC, Sumitomo Elec to buy cable firm from Longreach

TOKYO, July 1 (Reuters) - Japan's NEC Corp (6701.T) and Sumitomo Electric Industries (5802.T) said on Tuesday they would buy a Japanese undersea cable maker from an investment fund managed by the Longreach Group to secure a stable supply of optical cables.

NEC, which is betting on growing demand for fibre-optic connections, plans to take about 75 percent of OCC Corp's holding company, with Sumitomo Electric taking the remaining 25 percent.

Both firms declined to comment on the price of the deal, to be completed later in July.

Longreach bought restructuring OCC from the state-owned turnaround fund Industrial Revitalization Corp of Japan in 2006.

In 2004, the IRCJ had invested 1.5 billion yen ($14 million) in OCC, as well as taken on its 12.1 billion yen in debt, of which 8.08 billion yen was forgiven by creditors.

OCC had sales of 17.5 billion yen ($165 million) in the year ended in March and is now in the black, NEC spokesman Takehiko Kato said.

NEC, which holds a 20 percent share of the global undersea cable market, hopes the acquisition will help it expand its cable sales to Tyco (TEL.N) and Alcatel-Lucent (ALUA.PA), which each hold about a 40 percent market share.

Shares of NEC closed the morning session up 1.3 percent at 563 yen while Sumitomo Electric closed up 0.2 percent at 1,351 yen. The benchmark Nikkei average .N225 was up 0.3 percent. (Reporting by Mayumi Negishi; Editing by Chris Gallagher)