OKI to Transfer Shares of its Semiconductor Business Subsidiary to ROHM
TOKYO, May 29, 2008 -- Rohm Co., Ltd. (TSE:6963) and Oki Electric Industry Co., Ltd. (TSE: 6703) announced that the two companies have reached a basic understanding of OKI spinning-off its semiconductor business through a company split, and transfer 95% of its issued shares to ROHM. The two companies will sign a definitive agreement based on the premise of OKI gaining approval of spinning-off the semiconductor business at its annual shareholder meeting.
OKI has been implementing company-wide initiatives to revamp its business structure to increase corporate value and gain competitive edge as competition becomes more global and fiercer. As part of the initiatives, OKI has been discussing on how to expand its semiconductor business. On the other hand, ROHM has been looking for opportunities to improve its corporate value to advance as an IDM semiconductor company with a wide range of product portfolio with competitive edge. Based on this background, the two companies agreed on the transfer of OKI's semiconductor business shares.
"We are pleased to announce this basic understanding with ROHM, a company with high esteem," said Naoki Sato, Executive Vice President at OKI. "While leveraging OKI's semiconductor fabs for products based on our advanced technologies such as low power consumption, high voltage processing, digital/analog mixed processing and small-size packaging technologies, OKI will utilize Rohm's leading-edge production processes for products such as system LSIs and logic LSIs that currently use outside fabs."
"With this share transfer, we can create a synergy effect to strengthen both sales and profit for the two companies by complementing each other, as the overlap of our products is relatively small," said Satoshi Sawamura, Managing Director at ROHM. "We will become more competitive as we expand our product line up and maximize our advanced production capabilities."
Both companies will enhance their sales skills by maximizing the sales network, technology and quality support network both in Japan and overseas.
Following is the detail of the share transfer of OKI's semiconductor business:
1. Summary of the subsidiary subject for share transfer
- Company name
- OKI Semiconductor Co., Ltd. (plan)
- Representative
- Hironori Kitabayashi, President and Representative Director (plan)
- Address
- 550-1 Higashi Asakawa Cho, Hachioji, Tokyo, Japan (plan)
- Date of foundation
- October 1, 2008 (plan)
- Business activity
- Manufacture and sell system LSIs, logic LSIs, memory LSIs and high-speed optical communication devices, and offer foundry service
- Fiscal term
- Ending March 31 (plan)
- Employees
- Consolidated: Approx. 6,000 (plan)
- Major offices
- Headquarters and production plants (Miyagi Prefecture, Miyazaki Prefecture, Tokyo and Thailand) (plan)
- Capital
- 20 billion yen (plan)
- Issued shares
- 10,000 shares (plan)
- Major share holder
- Oki Electric Industry Co., Ltd. 100% (plan)
- Financial data
- No recent data since the company will be established in Oct. 2008
2. Value of share transfer
Based on the agreement of a share value of 90 billion yen (equivalent to 100% of the share), the two companies will make adjustments at the day of split.
3. Schedules
- May 28, 2008
- Agree on basic understanding at board meeting
Sign Letter of Understanding - June 27, 2008
- OKI, to pass a resolution on the business split at the shareholders' meeting
- October 1, 2008
- Day of split and transfer of share
4. Plans going forward
By carefully examining the business, the two companies will continue discussion towards a definitive agreement. Both companies will announce its consolidated financial projections when finalized.
About Rohm Co., Ltd.
ROHM was established in Kyoto Japan in 1958 and designs, manufactures and sells various types of semiconductors in consumer electronics, mobile phone and network industries and other applications. ROHM's design and manufacture teams provide high quality products to customers through its global design centers and sales networks world wide. ROHM involves over 20,000 employees world wide and achieved 373Billion yen sales in FY 2008(year ended March 31, 2008). For additional information, please visit the web site at http://www.rohm.com
About Oki Electric Industry Co., Ltd.
Founded in 1881, Oki Electric Industry Co., Ltd. is Japan's first telecommunications manufacturer, with its headquarters in Tokyo, Japan. OKI provides top-quality products, technologies and solutions to its customers through its info-telecom system business, semiconductor business and printer business. All three businesses function as a collective force to create exciting new products and technologies that satisfy a spectrum of customer needs in various markets. Visit OKI's global web site at http://www.oki.com/.
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- Press contact for ROHM:
- Public Relations and Investor Relations Dept.
Phone: +81-75-311-2121 - Press contact for OKI:
- For Europe and Americas: Public Relations Division
Phone: +1-408-737-6279 - For Asia and Other Areas: Public Relations Division
Phone: +81-3-3580-8950
- * Information in the press releases is current on the date of the press announcement, but is subject to change without prior notice.