Japanese semiconductor manufacturer Rohm has bought the microchip operations of its rival, Oki Electric, for  approximately $913 million.

Oki wants to spin off its chip-making business into a new company Oki Semiconductor and then sell a 95 percent stake in it to its rival, Rohm. The deal is expected to complete by October.

The merger will create Japan's seventh-largest semiconductor maker in terms of sales. In a joint statement the two companies said that the semiconductor business that Rohm is going to acquire overlaps little with Rohm's existing chip businesses, and the deal is expected to help both Rohm and the newly created company improve profitability.