The move was widely anticipated as part of the firm's renewed interest in the printing market ever since it announced its new digital strategy in 2003.

Sun Chemical will use the cash from the transaction to fund strategic growth in new markets and in key new technologies.

The deal is due to be completed in April subject to regulatory approval when Kodak will pay Sun Chemical 168m ($317m) in cash. It will make further cash payments including 106m in the third quarter of 2006 and further annual payments from 2008 to 2013 to a total of 433m.

"Bringing KPG together with Kodak's existing graphic communications businesses Kodak Versamark, NexPress and Encad will enhance our operations, extend our coverage worldwide, complement our present portfolio and strengthen Kodak's ability to serve our customers in the fast-growing graphic communications market," said Kodak president and chief operating officer Antonio Perez.

Kodak Graphics Communications Group chief marketing officer Barbara Pellow said that the division would have a unified sales force selling the entire product range of all group companies as well as a "unified go to market". She added that KPG gave the group "great presence" in the market.

Story by Barney Cox