The two companies had state monopolies through 1989, but lost their leading positions with the advent of commercial competition. The decision to merge the two firms was made by the owner, Hungarian State Holding Company (www.mnvzrt.hu). Negotiations began in November and lasted through April. The process will be completed in the beginning of September.

The new company name will be Mokep-Pannonia Ltd. Pannonia has been idle in recent years, but the new company plans to revitalize animation production, co-producer Jeno Racskay, CEO of the company and ex-Member of Parliament. told FNE. Racskay was previously the CEO of MOKEP and managed the consolidation at Pannonia.

Mokep-Pannonia plans to distribute 7-10 theatrical releases a year, expand their position at the DVD distributing market, and move into the VOD market, according to Racskay. The new company will also clear the rights to Pannonia's valuable archive of animation films.