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Casio Hitachi Mobile Communications to Merge with NEC’s Mobile Terminal Unit

September 14, 2009

TOKYO, September 14 /PRNewswire-FirstCall/ — NEC Corporation (NEC; TSE:
6701), Casio Computer Co., Ltd. (Casio; TSE: 6952), and Hitachi, Ltd.
(Hitachi; TSE: 6501/NYSE: HIT) today announced an agreement to integrate
their mobile terminal businesses in April 2010 through the establishment of a
joint venture company.

1. About the Business Integration

NEC develops and manufactures mobile terminals for NTT DOCOMO, INC. and
SoftBank Mobile Corp. that capitalize on the company’s core competencies and
incorporate wireless communications technologies such as W-CDMA (*1) and LTE
(*2), Linux (*3) platform development, low power consumption innovations and
ultra-thin technologies.

In 2004, Casio and Hitachi jointly established Casio Hitachi Mobile
Communications Co., Ltd. (CHMC) as a mobile terminal business company. CHMC
capitalizes on image technologies from Casio’s digital camera business,
water/shock resistance technologies from Casio’s wristwatch development and
Hitachi’s image processing technologies in order to provide mainly CDMA
focused mobile handsets for KDDI Corporation and SoftBank Mobile Corp. in
Japan as well as Verizon Wireless in the USA and LG Telecom in the Republic
of Korea.

The new company will boast a competitive portfolio of products that draws
strength from the complete integration of business functions between NEC’s
Mobile Terminal Operations Unit and CHMC, as well as merges the advanced
technologies and product development experience of each company. Furthermore,
NEC’s IT/Network technology supported product development capabilities linked
to service business for enterprises and consumers, combined with CHMC’s
consumer product technologies and planning strength, is expected to result in
the creation of innovative synergies and the development of appealing new
products, in addition to future growth that is anticipated from a range of
new areas.

NEC, Casio and Hitachi will integrate their mobile terminal business in
order to strengthen both domestic and international business while increasing
competitive strength and capitalizing on each company’s brand recognition
through (1) achieving synergies in a variety of fields, including sales
expansion, procurement and customer service, and (2) reinforcing product
development by unifying technological assets, know-how and resources.

2. About the New Joint Venture Company

Overview of the new joint venture company formed through the integration
of NEC’s Mobile Terminal Operations Unit with CHMC

    Company Name: NEC CASIO Mobile Communications, Ltd.

    Head Office: Kawasaki City, Kanagawa Prefecture, Japan (NEC
    Tamagawa plant)

    Capital: 1 billion JPY (at start of the joint venture)

    Share: NEC: 66%, Casio: 17.34%, Hitachi: 16.66%

    Capital increase planned to take place by the end of June 2010

    Capital after increase: 5 billion JPY

    Share after capital increase: NEC: 70.74%, Casio: 20%,
    Hitachi: 9.26%

    Number of Board Members: 8 (NEC: 6, Casio: 2, representative director
    selected by NEC)

    Consolidated Number of Employees:

    2,200 including NEC Saitama (non-consolidated: 1,300)

    Established: April 2010 (planned)

    Accounting Period: April to March

    Business Summary: Mobile terminal product planning,
    development, production, sales and maintenance

    3. Business Integration Procedure
    1) By the end of December 2009: NEC establishes a 100% subsidiary company

2) April 2010: The newly established subsidiary takes over NEC’s mobile
handset business through company split (*4)

3) Same day as (2): The newly established company merges with CHMC (*5)

Other terms and conditions relating to the merger of the newly
established subsidiary with CHMC are currently under discussion. The details
will be announced upon their conclusion.

(*1) W-CDMA:

Wideband Code Division Multiple Access is a 3rd generation (3G) mobile
phone communications system.

(*2) LTE:

Long Term Evolution is a reference term for 3G and 3.9G technologies.
These are next generation mobile phone data communications methods that
further accelerate current HSDPA high speed communications standards.

(*3) Linux:

Linux is a UNIX type free software operating system developed by Linus
Torvalds. Linux has been adopted by computers and a range of technologies
that include mobile phones.

(*4) The details of NEC’s company split will be announced as soon as they
have been determined.

(*5) The effects that the merger will have on Casio’s business will be
announced as soon as they have been determined.

* Product names, company names, etc. used herein are trademarks or
registered trademarks of their respective company.

    Overview of CHMC (The to-be-transferred Casio subsidiary company)

    Company Name: Casio Hitachi Mobile Communications Co., Ltd.

    Established: April 1, 2004

    Business Summary: Cellular phone product development, design,
    production, procurement, quality control, sales and maintenance

    Head Office: Higashiyamato City, Tokyo, Japan

    CEO: Tateki Ohishi

    Capital: 3 billion JPY (share: Casio: 51%, Hitachi: 49%)

    Number of Employees: 506 (as of March 2009)

    Accounting Period: April to March

    Number of Shares Issued: 60,000

    Three-Year Summary of Business Performance and Financial Condition:

                                                            (millions of yen)

    Fiscal Term                  March 2007   March 2008  March 2009
    Total assets                     65,791       62,761      61,063
    Net assets                       15,499       15,400       2,864
    Net assets per share (in yen)   258,323      256,662      47,733
    Net sales                       159,308      156,571     156,750
    Operating income                  5,184        1,068         959
    Ordinary income                   4,511        (366)          63
    Net income                        3,126        (100)    (12,536)
    Net income per share (in yen)    52,106      (1,661)   (208,929)
    Dividends per share (in yen)          -            -           -

CHMC, presently a consolidated subsidiary of Casio, will become an
equity-method affiliate with Casio holding a 20% stake in the new joint
venture company as a result of its merger with the newly established NEC
subsidiary and capital increase.

Cautionary Statement

This material contains forward-looking statements that necessarily depend
on currently available information and/or assumptions based on the companies’
judgments. A variety of factors could cause actual results to differ
materially from those in the forward-looking statements.

About NEC Corporation

NEC Corporation is one of the world’s leading providers of Internet,
broadband network and enterprise business solutions dedicated to meeting the
specialized needs of a diversified global base of customers. NEC delivers
tailored solutions in the key fields of computer, networking and electron
devices, by integrating its technical strengths in IT and Networks, and by
providing advanced semiconductor solutions through NEC Electronics
Corporation. The NEC Group employs more than 140,000 people worldwide. For
additional information, please visit the NEC website at: http://www.nec.com.

About Casio Computer Co., Ltd.

Casio Computer Co., Ltd. is one of the world’s leading manufacturers of
consumer electronics products and business equipment solutions. Since its
establishment in 1957, Casio has strived to realize its corporate creed of
“creativity and contribution” through the introduction of innovative and
imaginative products. Today, Casio’s offerings include timepieces, digital
cameras, cellular phones, electronic dictionaries, calculators, musical
instruments, system equipment, and electronic components such as LCDs. The
Casio Group employs more than 12,000 people worldwide, shipping over 100
million products per year, with net sales of 518 billion yen (approx US$5,286
million
) in the fiscal year ended March 2009. News and product information
from Casio is available at http://world.casio.com/

About Hitachi, Ltd.

Hitachi, Ltd., (NYSE: HIT / TSE: 6501), headquartered in Tokyo, Japan, is
a leading global electronics company with approximately 400,000 employees
worldwide. Fiscal 2008 (ended March 31, 2009) consolidated revenues totaled
10,000 billion yen ($102.0 billion). The company offers a wide range of
systems, products and services in market sectors including information
systems, electronic devices, power and industrial systems, consumer products,
materials, logistics and financial services. For more information on Hitachi,
please visit the company’s website at http://www.hitachi.com.

Casio Hitachi Mobile Communications Co., Ltd.

Casio Hitachi Mobile Communications Co., Ltd. was established on April 1,
2004
in a joint venture between Casio Computer Co., Ltd., and Hitachi, Ltd.
The company brings together the many highly competitive technological assets
possessed by Casio and Hitachi to provide customers with highly innovative
and reliable mobile phone products packed with cutting-edge technologies.
Since the merger, the firm’s operations have been streamlined and integrated
for maximum focus on its core competencies, faster and more efficient
development, and a robust production system. Today, Casio Hitachi Mobile
Communications provides innovative mobile devices for four major wireless
providers in Japan, South Korea and U.S.A. For more information, go to
http://ch-mobile.com/.

    Press Contacts:

    NEC Corporation
    Kosuke Yamauchi
    k-yamauchi@ce.jp.nec.com
    +81-3-3798-6511

    Casio Computer Co., Ltd.
    Shinobu Kurahashi
    kurahashi@casio.co.jp
    +81-3-5334-4830

    Hitachi, Ltd.
    Masahiro Takahashi
    PR@hdq.hitachi.co.jp
    +81-3-5208-9324

SOURCE NEC Corporation


Source: newswire



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