Notification of Corporate Split Concerning Epson and Wholly-Owned Subsidiary Company

 

- TOKYO, Japan, May 25, 2011 -

At a meeting of its board of directors, Seiko Epson Corporation ("Epson", TSE: 6724) decided that as of July 1, 2011 (planned effective date) it would acquire in an absorption-type split the quartz device business (excluding the sales and certain manufacturing operations) of wholly-owned subsidiary company Epson Toyocom Corporation ("Epson Toyocom"). Details are as follows.
Note that because this is an absorption-type split with a wholly-owned subsidiary, certain details have been omitted from this disclosure.

1. Purpose of split

In October 2010, Epson established its Microdevices Operations Division. By combining and efficiently managing the quartz device and semiconductor businesses in a single organization, Epson's goal is to create a strong business structure capable of bringing to market essential next-generation microdevices.
Against this background, Epson aims to lay business foundations that will enable it to generate true value for its customers. Enacting this corporate split will assist Epson in strengthening the functions of its microdevices business and will lead to accelerated decision making.

2. Outline of split

(1) Split timetable

Approval by board of directors meeting of contract concerning absorption-type split:
May 25, 2011

Conclusion of absorption-type split contract:
May 25, 2011

Planned split date (date effective):
July 1, 2011

Epson is carrying out this split based on article 796 clause 3 of the Japanese Companies Act, and Epson Toyocom based on article 784 clause 1 of the Companies Act. As a result, approval has been granted without reference to each company's shareholders' meeting

(2) Split method

This is an absorption-type split in which Epson Toyocom is the splitting company, and Epson is the absorbing company.

(3) Allocation of shares relating to split

Because Epson holds all the issued shares of Epson Toyocom, there will be no compensation paid to the latter as a result of this split

(4) Handling of share options and bonds with share options

This item is not applicable.

(5) Increase or decrease in capital relating to split

There will be no increase or decrease in capital as a result of this split.

(6) Rights and obligations assumed by acquiring company

Epson will acquire by absorption-type split the quartz device business of Epson Toyocom (excluding crystal device sales operations, crystal device manufacturing operations at the Miyazaki and Fukushima Plants, and artificial quartz manufacturing operations).

(7) Outlook for performance of obligations

Epson has determined that it expects to be able to fulfill its necessary liabilities after the split comes into effect.

3. Outline of companies involved in split

(as of March 31, 2011)

(1) Company name Seiko Epson Corporation
(acquiring company)
Epson Toyocom Corporation
(splitting company)
(2) Main office 4-1 Nishishinjuku 2-chome, Shinjuku-ku, Tokyo 421-8 Hino, Hino-shi, Tokyo
(3) Representative Minoru Usui, president Torao Yajima, president
(4) Business lines Development, manufacturing,
sales and service of information-related
equipment, electronic devices,
precision products and others
Development, manufacturing and sales of crystal devices
(5) Paid-in capital ¥53,204 million ¥12,266 million
(6) Founded May 18, 1942 November 12, 1949
(7) No. of issued shares 199,817,389 187,569,355
(8) End of fiscal year March 31 March 31
(9) No. of employees 74,551 (consolidated) 1,577 (non-consolidated)
(10) Principal shareholders and % ownership (as of March 31, 2011) Aoyama Kigyo Kabushiki Kaisha:10.36% Sanko Kigyo Kabushiki Kaisha: 7.15% The Master Trust Bank of Japan, Ltd. (Trust Account): 5.27% Seiko Epson Corporation: 100.00%
(11) Financial situation and business results in preceding fiscal year Fiscal year ended March 31, 2011 (consolidated) Fiscal year ended March 31, 2011 (non-consolidated)
Total net assets ¥270,808 million ¥22,697 million
Total assets ¥798,229 million ¥47,748 million
Total net assets per share ¥1,347.71 ¥121.01
Net sales ¥973,663 million ¥83,285 million
Operating income ¥32,709 million -¥6,067 million
Ordinary income ¥31,174 million -¥6,616 million
Net income ¥10,239 million -¥9,826 million
Earnings per share ¥51.25 -¥52.39
Dividend per share ¥20.0 -

4. Outline of operations to be acquired

Epson will acquire Epson Toyocom's quartz device business with the exception of sales and certain manufacturing operations.
There are no notes relating to the results of the operations to be acquired.

5. Epson's situation after the split

There will be no change to Epson's trading names, business lines, main office, representative, paid-in capital or end of fiscal year as a result of this split.

6. Outlook

Epson does not plan to revise its consolidated results outlook as a result of this split.

About Epson
Epson is a global imaging and innovation leader that is dedicated to exceeding the vision of customers worldwide through its compact, energy-saving, high-precision technologies, with a product line-up ranging from printers and 3LCD projectors for business and the home, to electronic and crystal devices.
Led by the Japan-based Seiko Epson Corporation, the Epson Group comprises nearly 75,000 employees in 100 companies around the world, and is proud of its ongoing contributions to the global environment and the communities in which it operates.
http://global.epson.com/