March 12 (Bloomberg) -- Sony Corp., the world’s second- largest maker of consumer electronics, will buy equipment for manufacturing liquid-crystal displays from Seiko Epson Corp.

The purchase will be part of an alliance between the Japanese electronics makers that will be formalized in a contract at the end of June, the companies said today in a statement to the Tokyo Stock Exchange.

Buying additional manufacturing capacity will enable Sony to expand market share as rival LCD makers including LG Display Co. and Sharp Corp. report losses and close factories. Seiko Epson, which yesterday widened its full-year loss forecast to a record, said it would be “difficult” to improve earnings from the business on its own as the global recession erodes demand for computers and mobile phones.

“This will give us technology to make lower-cost LCDs,” Sony spokesman Chisato Kitsukawa said today by telephone. “Adding this technology and new products will let us develop more sales routes.”

Sony, ranked eighth worldwide in smaller LCD panels with a 4.8 percent market share in 2008, while Seiko Epson ranked seventh at 7.3 percent, according to researcher DisplaySearch.

The two companies didn’t disclose purchase details in the statement, and Sony’s Kitsukawa didn’t give a price.

LCD Restructuring

Seiko Epson said it will close an LCD plant central Japanby the end of September and concentrate output of the panels at its factory in Tottori prefecture, in the west of the country.

Japan’s largest maker of inkjet printers, Seiko Epson yesterday said it expects a record net loss of 100 billion yen ($1 billion) for the year ending March 31 because of costs to reorganize its flat-panel and semiconductor operations.

The company based in Suwa, central Japan, is cutting back semiconductor and LCDs to focus on making printers and projectors as it seeks to weather demand eroded by the recession.

Sony fell 3.7 percent to close at 1,735 yen on the Tokyo Stock Exchange before the announcement, while Seiko Epson rose 2.7 percent to 1,117 yen. The benchmark Nikkei 225 Stock Average dropped 2.4 percent.