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Panasonic Newsroom TOPPress ReleaseMatsushita to Absorb Wholly-Owned Subsidiary


Main Contents begins from here.

Headquarters News

Dec 21, 2007

FOR IMMEDIATE RELEASE

Media Contacts:               Investor Relations Contacts:

Akira Kadota (Japan)          Makoto Mihara (Japan)
International PR              Investor Relations 
(Tel: +81-3-3578-1237)        (Tel: +81-6-6908-1121)

Panasonic News Bureau (Japan) Yoichi Nagata (U.S.)
(Tel: +81-3-3542-6205)        Panasonic Finance (America), Inc.
                              (Tel: +1-212-698-1362)
Jim Reilly (U.S.)
(Tel: +1-201-392-6067)

Munetsugu Takeda (Europe)
(Tel: +49-611-235-305)

Matsushita to Absorb Wholly-Owned Subsidiary



Osaka, Japan, December 21, 2007 -- Matsushita Electric Industrial Co., Ltd. (MEI [NYSE symbol: MC]), best known for its Panasonic brand, today announced that its Board of Directors has decided that MEI will absorb Matsushita Refrigeration Company, a wholly-owned subsidiary of MEI.

The merger is expected to take effect on April 1, 2008, at which point Matsushita Refrigeration Company will be merged into MEI.

Details of the merger are outlined below.

1. Purpose of merger

Under the new mid-term management plan, “GP3 Plan,” which started from fiscal 2008, ending March 31, 2008, MEI aims for achieving global excellence by accelerating growth strategies and implementing initiatives for innovating management quality, based on the concept of “steady growth with profitability.”

For further strengthening its refrigeration business centered on refrigerators, and for achieving further growth globally with an eye to entering into new markets, MEI will absorb Matsushita Refrigeration Company, a wholly-owned subsidiary of MEI, which produces and distributes refrigerators, vending machines, compressors and key devices for refrigeration and air conditioning products.

Through this merger, the new Home Appliance Group will utilize companywide management resources and management schemes, promote human resources development through broad exchanges of personnel, and reinforce its development structure both in Japan and overseas, thereby strengthening its refrigeration business globally. Locating air conditioners, refrigerators, and washing machines at the core of its business, the new Home Appliance Group will accelerate its growth strategies toward realization of the “GP3 Plan” under the integrated management of products from devices to finished goods.

2. Details of merger

(1) Merger schedule

December 21, 2007 Board of Directors meet to vote on merger
December 21, 2007 Signing of merger agreement
April 1, 2008 (planned) Effective date of merger
(Note: The merger will be conducted through the simplified procedures provided under the Company Law of Japan, by which resolutions of the shareholders' meeting of MEI and Matsushita Refrigeration Company will not be made.)

(2) Method of merger

MEI, as the continuing company, will absorb Matsushita Refrigeration Company, which will be subsequently dissolved.

(3) Treatment of stock acquisition rights and convertible bonds of the expiring company

There are no stock acquisition rights or convertible bonds issued by Matsushita Refrigeration Company.

3. Basic information of MEI and Matsushita Refrigeration Company

(As of March 31, 2007)
Trade Name MEI
(company to absorb)
Matsushita Refrigeration Company
(company to be absorbed)
Principal Lines of
Business
Manufacture and sale of electronic and electric equipment Manufacture and sale of refrigerators, vending machines, compressors, key devices for refrigeration and air conditioning products
Date of
Incorporation
December 15, 1935 February 12, 1939
Principal Office Kadoma-shi, Osaka, Japan Kusatsu-shi, Shiga, Japan
Representative Fumio Ohtsubo, President Yasuteru Fujii, President
Capital Stock
(million yen)
258,740 11,943
Shares Issued
2,453,053,497
176,583,954
Shareholders'
Equity
(million yen)
3,916,741
(consolidated basis)
-4,958
(parent company alone)
Total Assets
(million yen)
7,896,958
(consolidated basis)
48,317
(parent company alone)
Financial Closing Date March 31 March 31
Major Shareholders
and Shareholdings
Moxley & Co. 7.71%
The Master Trust Bank of Japan, Ltd.
(Trust account)
5.13%
Japan Trustee Services Bank, Ltd.
(Trust account)
3.42%
State Street Bank and Trust Co. 2.78%
Nippon Life Insurance Co. 2.73%
MEI 100%

Notes:

  1. Amounts less than one million yen have been rounded to the nearest whole million yen amount.
  2. The continuing company is subject to restriction on distributions of surplus.
  3. Stockholders' equity and total assets of Matsushita Refrigeration Company and its subsidiaries amount to -4,263 million yen and 50,940 million yen, respectively.

4. Effects of merger on MEI's financial results

Trade Name MEI
Principal Lines of
Business
Manufacture and sale of electronic and electric equipment
Principal Office Kadoma-shi, Osaka, Japan
Representative Fumio Ohtsubo, President
Capital Stock
(million yen)
No change shall be made by the merger.
Financial Closing Date March 31
Influence on Financial
Outlook
Through this merger, MEI will strengthen its refrigeration business globally and accelerate growth strategies toward realization of the new mid-term management plan “GP3.”
There shall be no change in the financial outlook for fiscal 2008, ending
March 31, 2008.

Disclaimer Regarding Forward-Looking Statements

This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Matsushita and its Group companies (the Matsushita Group). To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Matsushita Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Matsushita Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Matsushita undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Matsushita in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Matsushita Group operates businesses, or in which assets and liabilities of the Matsushita Group are denominated; the ability of the Matsushita Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the ability of the Matsushita Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Matsushita Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Matsushita Group; the possibility that the Matsushita Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Matsushita Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, and deferred tax assets; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes and other events that may negatively impact business activities of the Matsushita Group. The factors listed above are not all-inclusive and further information is contained in Matsushita's latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.


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