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February 14, 2000 |
Kokusai Electric, Hitachi Denshi and Yagi Antenna agree to merge --Will allow concentration of resources in the wireless communications sector and the provision of total solutions-- |
Kokusai Electric Co., Ltd.(TSE: 6756), Hitachi Denshi, Ltd.(TSE: 6780), Yagi Antenna Co., Ltd.(TSE: 6805) and Hitachi, Ltd.(TSE: 6501) today announced that Kokusai Electric, Hitachi Denshi and Yagi Antenna have signed a memorandum of merger under which the three companies agree to be equal parties in the merger to take place on October 1 this year. The new company thus formed, provisionally named Hitachi Kokusai Electric Inc., will provide complete continuity with respect to the existing business operations of the three companies, providing all customers with full support. At the same time, the consolidation of operations and the concentration of the companies' extensive wireless communications technologies will be used to develop business and customers in new sectors. In the information and communications industry sectors, the rapid pace of advances in mobile communications technology together with the high pace of IP network growth, the start of digital broadcasting, the convergence of communications and broadcasting and the trend toward deregulation are all helping to generate the rapid expansion of new markets. In November 1999, Hitachi announced its i.e. HITACHI medium-term business plan, which sets out how the Company is focusing on the strategic use of Hitachi Group resources as it restructures itself as a best solutions partner. Moreover, as part of a basic policy of increasing the market capitalization of the Company, Hitachi is promoting consolidated management by reorganizing, reviewing and strengthening liaison and coordination among Hitachi Group companies. Hitachi is currently reviewing its communications systems business on a consolidated basis. As part of this, in contrast to the former focus on telephone exchanges transmission equipment, the Company is now considering strengthening its business operations in the areas of IP network systems, wireless communications, optical products and network solutions and services to meet the increasing demand in data communications. The wireless communications business is a market sector that is undergoing rapid change. The three companies agreed to the merger as a way of meeting the challenge of such change by consolidating their operations, thereby helping to enhance their management structure and strengthen their development system. Hitachi Kokusai Electric Inc. will take over and continue the individual business operations in which the three merger partners are engaged in the areas of communications, broadcasting and semiconductors, and will use the consolidation and improvement of sales bases to expand sales networks in Japan and abroad and strengthen product service capabilities to thereby increase the scale of the business. Hitachi Kokusai Electric Inc. will use its extensive strengths in wireless technology combined with data and video technologies to provide a broad spectrum of wireless communications solutions in the sectors of mobile communications systems, digital broadcasting systems and customized communications systems and will also develop new areas of business such as Intelligent Transport Systems (ITS) and the next generation of information terminals. To meet the challenges posed by the rapid pace of progress in digital technology in the areas of communications and broadcasting, Hitachi Kokusai Electric Inc. will focus on expanding its business with the emphasis on the following strategic sectors. 1. Mobile communications systems: Base stations and other infrastructures, systems, and mobile terminals 2. Digital broadcasting systems: Satellite/ground wave and TV/radio total systems 3. Customized communications systems: Customized wireless infrastructures for subscriber-system based wireless access, and systems which ensure reliable communication for disaster control, airport and public safety, and other such applications. 4. New sectors: ITS, next-generation information terminals and other such new wireless markets With respect to the exchange ratios for the merger, Kokusai Electric will allot 0.44 new shares to shareholders of Hitachi Denshi, and 0.52 shares to shareholders of Yagi Antenna, for each share of respective companies. The new company will be headed by Makoto Endo. Outline of the Companies Hitachi Kokusai Electric Inc. (provisional) Head office: 3-14-20 Higashi-Nakano, Nakano-ku, Tokyo, Japan Establishment: Oct. 1, 2000 (planned) Capital: 10 billion yen at startup President: Makoto Endo Business: Manufacture and sale of communications and information equipment, electronic devices and electronic parts and components, broadcast and video systems, antennas, electrical communications construction works Sales target (unconsolidated basis): 195 billion yen (for the year ended Mar. 31, 2001) 265 billion yen (for the year ended Mar.31, 2004) No. of employees: 4,100 at startup Kokusai Electric Co., Ltd. Head office: 3-14-20 Higashi-Nakano, Nakano-ku, Tokyo, Japan Establishment: Nov. 1949 Capital: 8,400 million yen (as of Sept. 30, 1999) President: Makoto Endo Business: Manufacture and sale of communications and information equipment, electronic devices and electronic parts and components Net sales: 108,900 million yen (for the year ended Mar. 31, 1999) No. of employees: 2,196 (as of Mar. 31, 1999) Hitachi Denshi, Ltd. Head office: 1 Kanda Izumi-cho, Chiyoda-ku, Tokyo, Japan Establishment: Feb. 1948 Capital: 5,000 million yen (as of Sept. 30, 1999) President: Masahiro Soga Business: Manufacture and sale of broadcast and video systems, communications systems Net sales: 52,300 million yen (for the year ended Mar. 31, 1999) No. of employees: 1,349 (as of Mar. 31, 1999) Yagi Antenna Co., Ltd. Head office: 1-6-10 Uchi-Kanda, Chiyoda-ku, Tokyo, Japan Establishment: Jan. 1952 Capital: 3,500 million yen (as of Sept. 30, 1999) President: Kyohei Kasaba Business: Manufacture and sale of antennas and devices, electrical communications construction works Net sales: 16,200 million yen (for the year ended Mar. 31, 1999) No. of employees: 507 (as of Mar. 31, 1999) Cautionary Statement Statements in this news release contain forward-looking statements which reflect management's current views with respect to certain future events and financial performance. Words such as "anticipate," "believe," "expect," "estimate," "intend," "plan," "project" and similar expressions which indicate future events and trends identify forward-looking statements. Actual results may differ materially from those projected or implied in the forward-looking statements and from historical trends. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate. Factors that could cause actual results to differ materially from those projected or implied in any forward-looking statements include, but are not limited to, rapid technological change, particularly in the field of information and communications equipment; uncertainty as to the ability of the companies concerned to continue to develop products and to market products that incorporate new technology on a timely and cost-effective basis and achieve market acceptance; fluctuations in product demand and industry capacity; exchange rates and their fluctuations between the yen and other currencies in which the companies concerned make significant sales or in which assets and liabilities of the companies concerned are denominated, particularly between the yen and the U.S. dollar; uncertainty as to the access of the companies concerned to liquidity or long-term financing; uncertainty as to the ability of the companies concerned to implement measures to reduce the potential negative impact of fluctuations in product demand and/or exchange rates; general economic conditions and the regulatory and trade environment of major markets for the companies concerned, particularly, the United States, Japan and elsewhere in Asia, including, without limitation, direct or indirect restriction by other nations of imports; uncertainty as to the access of the companies concerned to, or protection for, certain intellectual property rights, particularly those related to information and communications equipment; the dependence of the companies concerned on alliances with other corporations in designing or developing certain products; and the market prices of equity securities in Japan, declines in which may result in write-downs of equity securities the companies concerned hold.
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WRITTEN BY Secretary's Office (C) Hitachi, Ltd. 2000. All rights reserved. |