TOKYO, February 10, 2004 — Canon Inc. ("Canon") and Igari Mold Co. Ltd. ("Igari Mold") entered into a basic agreement on December 25, 2003, by which Igari Mold will become a wholly owned subsidiary of Canon through share exchange. Canon and Igari Mold today entered into a formal share exchange agreement and announced the terms of the share exchange.
| Entry into share exchange agreement | February 10, 2004 |
| Announcement of simplified share exchange | February 11, 2004 |
| Shareholders' meeting to approve share exchange agreement (Igari Mold) |
February 25, 2004 |
| Effective date of share exchange | March 29, 2004 |
* Canon is entitled to undertake the share exchange without the approval of its shareholders pursuant to the provisions of Paragraph 1 of Article 358 of the Commercial Code of Japan
("Simplified Share Exchange").
| Canon (Sole parent company) |
Igari Mold (Wholly owned subsidiary) |
|
| Share exchange ratio | 1 | 9.030 |
| Notes: 1) |
Allotment of shares
9.030 shares of common stock of Canon will be allotted per one (1) share of common stock of Igari Mold. |
| 2) |
Calculation basis for share exchange ratio
Canon and Igari Mold requested a third party, Nikko Cordial Securities Inc., to evaluate the exchange ratio, and using that evaluation as a reference and after discussions between themselves, agreed on the above exchange ratio. |
| 3) |
Evaluation method by the third-party organization
Canon was evaluated using the Market Price Method and Igari Mold was evaluated using the Discounted Cash Flow Method. |
| 4) |
Shares to be issued under share exchange
Canon will use treasury shares for exchange with the shareholders of Igari Mold, therefore no new shares will be issued. |
| (1) Name | Canon (non-consolidated) | Igari Mold (non-consolidated) |
| (2) Business activities |
1. Production and sales of optical
machinery 2. Production and sales of audio, electric, and electronic machinery 3. Production and sales of precision machinery 4. Production and sales of medical machinery 5. Production and sales of general machinery 6. Production and sales of parts and components of the above products 7. Programming and sales of software |
Design and manufacture of precision molds for plastic components |
| (3) Date of incorporation |
August 1937 | November 1972 |
| (4) Representative | President & CEO Fujio Mitarai | President & CEO Masaomi Igari |
| (5) Location of head office |
Ohta-ku, Tokyo | Nishi Ibaraki-gun, Ibaraki prefecture |
| (6) Capital | Yen 168,892 million (as of Dec. 31, 2003) |
Yen 32 million (as of Feb. 28, 2003) |
| (7) Outstanding shares |
881,339 thousand shares (as of Dec. 31, 2003) |
64,000 shares (as of Feb. 28, 2003) |
| (8) Shareholders' equity |
Yen 1,444,160 million (as of Dec. 31, 2003) |
Yen 1,100 million (as of Feb. 28, 2003) |
| (9) Total assets | Yen 2,059,317 million (as of Dec. 31, 2003) |
Yen 3,306 million (as of Feb. 28, 2003) |
| (10) Fiscal year end | December 31 | Last day of February |
| (11) Number of employees |
18,828 (as of Dec. 31, 2003) |
160 (as of Dec. 25, 2003) |
| (12) Major business contacts |
Domestic and overseas Canon Group marketing companies | Plastic parts machining makers, electric appliance makers, precision equipment makers, etc. |
| (13) Major shareholders and their share percentages |
State Street Bank and Trust Company
7.19% Japan Trustee Services Bank, Ltd. (Trust Account) 6.95% The Dai-ichi Mutual Life Insurance Company 6.70% (as of Dec. 31, 2003) |
Masaomi Igari 89.18% Nobuko Igari 10.28% Yota Igari 0.53% (as of Dec. 25, 2003) |
| (14) Main banks | Mizuho Corporate Bank, Ltd. Sumitomo Mitsui Banking Corporation The Bank of Tokyo-Mitsubishi, Ltd. |
The Joyo Bank, Ltd. The Ibaraki-ken Credit Cooperative The Shoko Chukin Bank |
| Capital | There is no capital relationship between the two companies |
| Human Resources | There is no personnel relationship between the two companies |
| Business Connections | Orders from the Canon Group account for 7% of Igari Mold's sales volume (fiscal year ended February 28, 2003) |
| (1) |
Name, business activities, representative and location of head office
There will be no change in the name, business activities, representative or location of head office of either company from the corresponding entries found in "2. Overview of the Companies Party to the Share Exchange" above. Igari Mold (wholly owned subsidiary) will appoint a new president and CEO at the company's first extraordinary general shareholders' meeting after the completion of the share exchange. |
| (2) |
Canon's stated capital
Canon's stated capital will not increase as a result of the exchange. |
| (3) |
Impact on Canon's business results
For Canon, the impact of the share exchange on business results is expected to be minimal. |
