|On Merger with NANJING FDK and Jinning Sanhuan Hi-Tech. Magnetic|
|May 26, 2004
|FDK Corporation announced today it determined the merger with NANJING FDK Corporation, its subsidiary and Jinning Sanhuan Hi-Tech. Magnetic Industrial Co., Ltd. (JSM), a Chinese company in order to strengthen ferrite business.
1. Purpose of the Merger
The ferrite business has been exposed under the severe market environment, such as intensified price competition by acceleration of the production shift to China, and the rapid rise of Chinese manufacturers. To strengthen ferrite business and to establish profitable business foundation under this competitive environment, we decided to found the new company by the merger with NANJING FDK and JSM. It also aims to attain business expansion and increase in efficiency.
In addition, as announced in this January, ferrite production of in Japan is discontinued and production facilities and equipments have been transferring to Nanjing. Furthermore, Shanghai FDK will be also discontinued to produce these products until the first half of this fiscal year and thus the production of ferrite products will be consolidated in this new JV in Nanjing.
Therefore, the new company will be the one of leading manufacturer of ferrite products by its capacity. By the synergy effect of our advance technology and stellar sales operations of the Chinese company, we will strengthen our business.
2. Outline of the Merger
Merger will be exercised with the form which JSM will be taken over by NANJING FDK. Merger agreement will be made by the end of this May and the merger procedure will be completed until the end of this August. Due to the change of the investment ratio by this merger, the new company turns into the equity method affiliate from the consolidated subsidiary of FDK.
3. Profile of the New Company
4. Influence of the Merger
The influence of this merger to the business performance of FDK on the term ended March, 2005 will be limited.
Media inquiries should be directed to:
Corporate Communication Group