2003
Dec.19, 2003
Minebea Co., Ltd.
Business Separation of Fan Motor and Stepping Motor Divisions through Business Integration
We have been making preparations to launch a joint venture company ("Integrated Company") on April 1, 2004 (planned) with Matsushita Electric Industrial Co., Ltd. ("Matsushita") with the aim of integrating all functions of the two companies' information equipment motor business in four categories (fan motors, stepping motors, vibration motors and DC brush motors).
The Board of Directors of Minebea has resolved at a meeting held today to separate its Fan Motor and Stepping Motor Divisions ("Separation") effective March 1, 2004 (planned) and transfer these divisions to the Integrated Company. Matsushita will subsequently separate and transfer its information equipment motor business to the Integrated Company effective April 1, 2004 (planned). Upon completion of the business transfer by the two companies, the Integrated Company will start its operations.
The two companies have today launched a company to make preparations for the planned business integration, named "Minebea-Matsushita Motor Corporation" (Meguro-ku, Tokyo).
The basic terms of the business separation and the subsequent integration are outline as follows:
1. Purpose of Business Separation and Business Integration
The Separation and the subsequent business integration with Matsushita aim to create a highly profitable business structure in the area of information equipment motors. This can be achieved by enhancing business efficiency to the maximum and winning the leading position in highly competitive global market of information equipment motors, utilizing product development technologies, manufacturing capabilities and sales capacity of Minebea and Matsushita.
The Integrated Company will be positioned among the top three in each of the four product categories, based on unit sales results for fiscal year ended March 31, 2003.
While competition in the information equipment motor business is becoming increasingly severe throughout the world, owing to the competition among many Japanese makers and the rise in the number of market newcomers from China, Taiwan and Korea, further growth in demand can be expected in new product applications, such as personal computers, plasma displays, LCD TVs, game machines, mobile phones, digital home electric appliances and information terminals. The annual global market growth forecast exceeds 10% on unit sales basis.
The Integrated Company will tap Minebea's advanced ultra-precision machining, mass-production technologies and cost competitiveness and Matsushita's latest product development technologies to strengthen its high added-value product development/manufacturing capabilities and accelerate development speed, as well as establishing a strong customer support structure.
The Integrated Company aims to increase its global competitiveness and capture the leading position in markets worldwide for information equipment motors through standardization of manufacturing processes and designing methods, utilizing advanced production engineering and product development technologies of Minebea and Matsushita, and through cost reduction efforts from development of advanced magnet/material analysis technologies.
The establishment of the Integrated Company will affect the following operational bases:
Minebea
- 1) Karuizawa Manufacturing Unit (Nagano)
- 2) Hamamatsu Manufacturing Unit (Shizuoka)
- 3) Minebea Electronics Co., Ltd.
- 4) Production bases in Thailand and China
Matsushita Electric
- 1) Motor Company's Information Equipment Motor Unit (Osaka and Tottori)
- 2) Production bases in Singapore, Malaysia and China
2. Outline of Business Integration (through Summary Separation)
(A) Schedule for business integration
| Dec. 19, 2003 | Board resolution to approve the business integration agreement and the business separation agreement, followed by signing of the business integration agreement |
|---|---|
| Jan. 7, 2004 | Signing of the business separation agreement |
| Mar. 1, 2004 | Separation to come into effect and to be registered |
| Apr. 1, 2004 | Matsushita's business separation to come into effect The Integrated Company to start its operations |
(B) Method of business separation
1) Method
Minebea will separate a certain part of its businesses and the Integrated Company (the succeeding company) will succeed the separated businesses. (Minebea plans to adopt summary separation.)
2) Reason for adopting this method
This method was chosen because it was determined to be the most efficient means to transfer the relevant businesses.
(C) Allotment of shares
1) Share allotment ratios
Upon Separation, the succeeding company will issue 2,994,120 shares and allot such shares to Minebea. Furthermore, upon completion of the business integration procedures, Minebea and Matsushita will hold 60% and 40% shares in the Integrated Company, respectively.
The Integrated Company will be included among Minebea's consolidated group companies.
Although the Integrated Company will be autonomously responsible for managing its business, important management decisions will be made upon agreement between Minebea and Matsushita.
2) Calculation method for share allotment ratios
Minebea and Matsushita separately consulted their respective outside financial advisors, regarding the assessment of the overall value of businesses involved in the integration of information equipment motor businesses. Based on such assessment, both companies held negotiations, whereupon Minebea calculated the number of shares to be allotted to it by the succeeding company in consideration of the value of its information equipment motor business to be separated and the number of shares issued by the succeeding company.
(D) Cash distribution upon business separation
There will be no cash distribution in relation to the business separation.
(E) Rights and obligations to be succeeded
Assets, liabilities, rights and obligations involved in the businesses to be separated and transferred, which are considered mandatory for the succeeding company to operate the business to be succeeded.
(F) Prospects for paying debt obligations
Minebea believes that both Minebea and the succeeding company can pay the debt obligations to be incurred as a result of Separation.
3. Basic information for Minebea and Matsushita (non-consolidated basis)
| Trade Name | Minebea Co., Ltd. (company to separate a unit) |
Matsushita Electric Industrial Co., Ltd. (company to separate a unit) |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Principal Lines of Business | Manufacture and sale of bearings, and rotary components | Manufacture and sale of electronic and electric equipment | ||||||||||||||||||||
| Date of Incorporation | July 16, 1951 | December 15, 1935 | ||||||||||||||||||||
| Principal Office | Kitasaku-Gun, Nagano, Japan | Kadoma-shi, Osaka, Japan | ||||||||||||||||||||
| Representative | Tsugio Yamamoto, Representative Director, President and Chief Executive Officer |
Kunio Nakamura, President | ||||||||||||||||||||
| Capital Stock (million yen) | 68,258 | 258,738 | ||||||||||||||||||||
| Shares Issued | 399,167,695 | 2,453,051,029 | ||||||||||||||||||||
| Shareholders' Equity(million yen) | 181,057 | 2,788,194 | ||||||||||||||||||||
| Total Assets(million yen) | 367,810 | 5,231,618 | ||||||||||||||||||||
| Financial Closing Date | March 31 | March 31 | ||||||||||||||||||||
| No. of Employees | 2,503 | 52,362 | ||||||||||||||||||||
| Major Customers | Sold mainly to information telecommunication equipment industry, automotive industry, home electric appliance industry. | Consumer products-widely distributed to general public through consumer and household equipment sales networks.Business and industrial equipment and components-- sold mainly to corporations, government agencies and manufacturers through systems and industrial sales networks. | ||||||||||||||||||||
| Major Shareholdersand Shareholdings |
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| Major Banks | The Sumitomo Trust and Banking Co., Ltd., Sumitomo Mitsui Banking Corporation, etc. | Sumitomo Mitsui Banking Corporation, The Resona Bank, etc. | ||||||||||||||||||||
| Relationship between Minebea and Matsushita | Capital: None | |||||||||||||||||||||
| Personnel: None | ||||||||||||||||||||||
| Transactions: Joint Product Development and Consignment Production of DC Axial Flow Box Fan Motors | ||||||||||||||||||||||
(N.B.)Amounts less than one million yen have been omitted.(hereinafter the same)
Financial results for the most recent three fiscal years (non-consolidated basis)
(in millions of yen, except per share amounts)
| Minebea Co., Ltd. (company to divide a unit) |
Matsushita Electric Industrial Co., Ltd. (company to divide a unit) |
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|---|---|---|---|---|---|---|
| Fiscal Year ended | 2001/3 | 2002/3 | 2003/3 | 2001/3 | 2002/3 | 2003/3 |
| Net Sales | 197,675 | 175,218 | 162,952 | 4,831,866 | 3,900,790 | 4,237,869 |
| Operating Profit (Loss) | 12,246 | 1,848 | 5,018 | 76,634 | (92,952) | 52,884 |
| Recurring Profit (Loss) | 12,127 | 10,033 | 11,062 | 115,494 | (42,480) | 80,196 |
| Net Income (Loss) | 3,947 | 4,351 | 1,227 | 63,687 | (132,410) | 28,828 |
| Net Income (Loss) per Share (in yen) | 9.89 | 10.90 | 3.08 | 30.63 | (63.79) | 12.80 |
| Annual Dividends per Share (in yen) | 7.00 | 7.00 | 7.00 | 12.50 | 10.00 | 12.50 |
| Shareholder's Equity per Share (in yen) | 452.34 | 454.01 | 454.12 | 1,306.37 | 1,225.39 | 1,173.14 |
4. Description of the business to be separated from Minebea
(A) Business to be separated
Development, manufacturing, sale of fan motors and stepping motors
(B) Operating results of the business to be divided for the year ended March 31, 2003 Net sales : Approximately 35,244 million yen
(C) Assets and liabilities of the business to be divided (forecast for March 1, 2004)
(in millions of yen)
| Assets | Liabilities | ||
|---|---|---|---|
| Item | Book Value | Item | Book Value |
| Assets | 5,486 | Liabilities | 1,151 |
| Shareholders' equity | 4,335 | ||
| Total | 5,486 | Total | 5,486 |
5. Basic information for the New Company
(A) Outline of New Company (forecast for April 2004)
| Trade Name | Minebea-Matsushita Motor Corporation |
|---|---|
| Principal Lines of Business | Development, manufacturing and sales of fan motors, stepping motors, vibration motors and DC brush motors |
| Start of Business | April 1, 2004 |
| Principal Office | Meguro-Ku, Tokyo, Japan |
| Representative | Tosei Takenaka, President and Representative Director |
| Capital Stock (million yen) | 10,000 |
| Shares Issued | 5,000,000 |
| Shareholders' equity (million yen) | Approximately 13,000 (consolidated) |
| Total Assets(million yen) | Approximately 40,000 (consolidated) |
| Annual Financial Closing Date | March 31 |
| No. of employees | Approximately 9,800 (worldwide) |
| Major Customers and Suppliers | (Customers)Canon Inc., Ricoh Company, Ltd., Fuji Xerox Co., Ltd., Matsushita
(Suppliers) Nippon Steel Corporation, Sumitomo Metal Industries, Ltd., SANYO Electric Co., Ltd., Matsushita, Minebea |
| Major Shareholders and Shareholdings | Minebea60% Matsushita40% |
| Major Banks | The Sumitomo Trust and Banking Co., Ltd., Sumitomo Mitsui Banking Corporation, etc. |
| Relationship with Minebea | Capital : Minebea 60%, Matsushita 40% |
| Personnel : Directors and corporate auditors will be from the parent companies, and employees will be also be sent from Minebea and Matsushita | |
| Transactions : Sale and purchase of finished products, merchandise and materials |
(B) Directors and Corporate Auditors of the New Company(as of April 1, 2004)
| President and Representative Director | Tosei Takenaka | (from Minebea) |
| Vice President and Representative Director | Miyuki Furuya | (from Matsushita) |
| Director | Kaoru Matsumoto | (from Minebea) |
| Director | Kunitake Matsushita | (from Minebea) |
| Director | Shuji Uehara | (from Minebea) |
| Director | Yugen Ota | (from Minebea) |
| Director | Rikuro Obara | (from Minebea) |
| Director | Kengo Katsuki | (from Matsushita) |
| Director | Kazuhisa Takahashi | (from Matsushita) |
| Director | Ikuo Miyamoto | (from Matsushita) |
| Corporate Auditor | To be determined | (from Minebea) |
| Corporate Auditor | To be determined | (from Minebea) |
| Corporate Auditor | To be determined | (from Matsushita) |
6. Effects of business division on Minebea's financial results
(A) Information about Minebea upon business separation
| Trade name: | Minebea Co., Ltd. |
| Principal lines of business: | Manufacture and sale of bearings, and rotary components |
| Principal office: | Kitasaku-Gun, Nagano, Japan |
| Representative: | Tsugio Yamamoto, Representative Director, President and Chief Executive Officer |
| Capital stock: | No change as a result of this business separation |
| Total assets: | Forecasted decrease resulting from business separation : approximately 4.7 billion yen |
| Annual Financial closing date: | March 31 |
| Effect on financial result: | Minebea currently expects that the business separation will have no significant effect on the company's operating results or financial position for fiscal year ended 2004/3. |
(B) Forecast of Minebea's financial results after the business separation
Minebea currently plans to announce forecasts for consolidated and parent alone financial results for the fiscal year ending March 31, 2005 in middle of May 2004.
Disclaimer Regarding Forward-Looking Statements
In this press release, all statements about Minebea and its Group of Companies (Minebea) that are not historical facts are future projections made based on certain assumptions and Minebea's management's judgment drawn from currently available information. Accordingly, when evaluating Minebea's performance or value as a going concern, these projections should not be relied on entirely. Please note that actual performance may vary significantly from any particular projection, owing to various factors, including, (i) changes in economic indicators surrounding us or demand trends; (ii) fluctuation of foreign exchange rates or interest rates; and (iii) our ability to continue R&D, manufacturing and marketing in a timely manner in the electronics business sector, where technological innovations are rapid and new products are launched continuously. Please note, however, this is not a complete list of the factors affecting actual performance.
Contact Person :
Masaki Ishikawa
Manager of Corporate
Communications/Investor
Relations Office
(Tel. 03-5434-8637)
Product information, contact and other context are subject to change without prior notice.
