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Omron Electronics, LLC News

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OMRON Announces Agreement to Acquire Pioneer Subsidiary
 
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Tokyo, Japan, Mar. 31, 2006 - (JCN Newswire) - OMRON Corporation (TSE: 6645; ADR: OMRNY), a global leader in automation, sensing and control technology, has announced that it has reached a preliminary agreement with Pioneer Corporation (TSE: 6773) to acquire 100% of Pioneer's stock in Pioneer Precision Machinery Corporation ('Pioneer PMC').

Both Omron and Pioneer PMC have been independently developing, manufacturing and marketing backlight units (BLU) primarily for use in small size LCDs. Forecasts suggest that the global LCD backlight unit business is set to grow rapidly. Aiming to be a leader in this expanding market, Omron has decided to integrate its technical expertise, production capacity and sales forces with Pioneer PMC's, to create a world class manufacturer of BLUs for small to large size LCDs.

Omron also plans to continue Pioneer PMC'S rubber business and resin molding business.

Following the basic agreement reached today, terms and schedule for the stock purchase will be discussed and finalized in due course.

1. Objective of the acquisition
  • Business consolidation and expansion in the small-size BLU market through enhanced product range: Omron aims to consolidate and expand its business in the market for small size backlights by adding Pioneer PMC's multi light source BLUs to its own proprietary point light source BLU product lineup.
  • Boosting competitiveness across the board through accelerating medium-size BLU business: Omron is aiming to boost its competitiveness in markets for all sizes of BLU, by expanding Pioneer PMC's medium-size BLU business alongside its own small- and large-size BLU business.
  • Boosting cost-competitiveness through economies of scale: Greater parts procurement power, optimized usage of production capacity and technology development synergies will allow Omron to boost its cost-competitiveness.
  • Increasing market share: As there is little overlap between Omron and Pioneer PMC's product ranges, Omron will increase its total BLU market share through this acquisition.

    2. Overview of Pioneer Precision Machinery Corporation (as of 31 March, 2006)
  • Trading name - Pioneer Precision Machinery Corporation
  • Representative - President Yoshio Nakano
  • Location - 6-1-1 Fujimi City, Tsurugashima-shi, Saitama, Japan
  • Date of establishment - 18 April,1977
  • Main Business Lines - Manufacture and marketing of high-precision parts for electronic equipment such as light-guiding plates for small LCDs.
  • Term of fiscal year - April to March
  • Number of Employees - Approx. 270 employees (as of 1 January, 2006)
  • Capital - 448 million yen
  • Sales - Approx. 35 billion yen (estimated for fiscal year 2005)
  • Issued stock - 884,022
  • Major shareholders - Pioneer (880,000 shares, 99.5%) Pioneer PMC Employee Share Ownership Plan (4,022 shares, 0.5%)

    3. Shares to be acquired from
  • Trading name - Pioneer Corporation
  • Representative - President Tamihiko Sudo
  • Location - 1-4-1 Meguro, Meguro-ku, Tokyo, Japan
  • Business lines - Sales and manufacturing of electronic devices and equipment
  • Capital - 49.049 billion yen

    4. Forecast
  • There will be minimal effect to OMRON's financial results for the fiscal year ending March 2006.

    About Pioneer Corporation
    Pioneer Corporation is one of the leading manufacturers of consumer and business-use electronics products such as audio, video and car electronics on a global scale. Its shares are traded on the New York Stock Exchange, Euronext Amsterdam, Tokyo Stock Exchange, and Osaka Securities Exchange.

    About OMRON
    Headquartered in Kyoto, Japan, OMRON Corporation is a global leader in the field of automation. Established in 1933 and headed by President Hisao Sakuta, OMRON has more than 25,000 employees in over 35 countries working to provide products and services to customers in a variety of fields including industrial automation, electronic components industries, and healthcare. The company is divided into five regions and head offices are in Japan (Kyoto), Asia Pacific (Singapore), China (Hong Kong), Europe (Amsterdam) and US (Chicago). The European organisation has its own development and manufacturing facilities, and provides local customer support in all European countries. For further information, please visit the OMRON home page at: www.omron.com
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