TOKYO, -- NEC Corporation (NEC; TSE: 6701), Casio Computer Co., Ltd. (Casio; TSE: 6952), and Hitachi, Ltd. (Hitachi; TSE: 6501/NYSE: HIT) 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 company2) 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/.
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