Press Release


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February 28, 2002



NOTICE ON GOING PRIVATE OF AIWA CO., LTD.

Sony Corporation
Nobuyuki Idei
Representative Director
(Code No.: 6758 Tokyo, Osaka, Nagoya,
Fukuoka, and Sapporo Stock Exchanges)

Aiwa Co., Ltd.
Masayoshi Morimoto
Representative Director
(Code No.: 6761 Tokyo Stock Exchange)


Notice is hereby given that Sony Corporation ("Sony") and Aiwa Co., Ltd. ("Aiwa") have resolved at the meeting of the Board of Directors of each company held today that Aiwa shall become a wholly-owned subsidiary of Sony by way of stock exchange, and have concluded the memorandum of understanding for stock exchange.

Officially, the stock exchange agreement is scheduled to be concluded in late April 2002, and, upon approval at the ordinary general meeting of shareholders of Aiwa to be held in mid-June 2002, the stock exchange will become effective on October 1, 2002.
1. Purpose of going private
Please refer to the attached document "Accelerating Structural Reform of the Sony Group's Electronics Business".
2. Conditions of stock exchange, etc.
(1) Schedule of stock exchange
February 28, 2002 Board meetings to approve memorandum of understanding for stock exchange
February 28, 2002 Conclusion of memorandum of understanding for stock exchange
Late April 2002 Board meetings to approve stock exchange agreement
Late April 2002 Conclusion of stock exchange agreement
Mid-June 2002 Shareholders meeting to approve stock exchange agreement (Aiwa)
September 30, 2002 Last day of submission period of share certificates (Aiwa)
October 1, 2002 Effective date of stock exchange

*Sony shall perform the stock exchange with Aiwa without the approval of a shareholders meeting to approve the stock exchange agreement pursuant to the provisions of Paragraph 1 of Article 358 of the Commercial Code of Japan.

(2) Stock exchange ratio

Sony retained Merrill Lynch Japan Securities Co., Ltd., and Aiwa retained Morgan Stanley Japan Limited, respectively for advice on the valuation method of the stock exchange ratio and other relevant matters.
Based on such advice and other relevant matters, Sony and Aiwa negotiated and came to an agreement of the stock exchange ratio as follows.

The stock exchange ratio shown below may be changed through discussions between Sony and Aiwa, if there are any material changes in any of the various conditions based on which the ratio has been determined.


Sony
Aiwa
Stock exchange ratio
1
0.049


(Note) 1.
Sony obtained from Merrill Lynch Japan Securities Co., Ltd. the opinion to the effect that the above-shown stock exchange ratio is fair to Sony from a financial standpoint under the certain qualifications and assumptions as described in the opinion letter that is planned to be attached to the statement of reason for determination of the stock exchange ratio to be kept at the head office pursuant to Article 358, Paragraph 9 of the Commercial Code. This opinion was rendered from overall consideration through various analysis methods such as evaluating the shareholders' intrinsic values of Sony and Aiwa on the consolidated basis principally through the discounted cash flow (DCF) method, evaluating the synergies expected from the transaction of Sony's having Aiwa as its wholly-owned subsidiary, examining the market prices of Sony's and Aiwa's shares, and analyzing the estimated financial impacts of the transaction on Sony and other relevant matters.
2.
Morgan Stanley Japan Limited, as a financial advisor to Aiwa, rendered its opinion to the Aiwa Board of Directors that the stock exchange ratio is fair, from a financial point of view, to the holders other than Sony of Aiwa common stock. In connection with analyzing the fair values of Sony and Aiwa respectively, Morgan Stanley performed Discounted Cash Flow Analysis, Comparative Stock Price Performance Analysis, Comparable Company Analysis and selected Comparable Transactions Analysis. In arriving at its opinion, Morgan Stanley considered the results of all of its analysis or factors considered by it.
3.
Number of shares to be issued upon stock exchange:2,502,491 shares of common stock of Sony
(For each share of Aiwa common stock, Sony shall issue 0.049 shares of its common stock.)

3. Summary of Parties (as of September 30, 2001)
(1) Trade name
Sony Corporation
AIWA CO., LTD.
(2)Kind of business
Manufacture and sale of electronic and electrical machines and equipment
Manufacture and sale of electronic and electrical machines and equipment
(3) Date of incorporation
May 7, 1946
June 20, 1951
(4)Location of head office
7-35, Kitashinagawa 6-chome,Shinagawa-ku, Tokyo
2-11, Ikenohata 1-chome,Taito-ku, Tokyo
(5)Representative
Nobuyuki Idei, Representative Director
Masayoshi Morimoto,Representative Director
(6)Share capital ¥476,027 million ¥33,111 million
(7)Total number of shares issued and outstanding 922,760,001 shares 132,210,464 shares
(8)Shareholders' equity ¥1,868,463 million ¥34,746 million
(9)Total assets ¥3,615,198 million ¥156,610 million
(10)Date of settlement March 31 March 31
(11) Number of employees 18,519 1,176
(12)Major customers Affiliated manufacturing and salescompanies in and outside Japan Affiliated manufacturing and salescompanies in and outside Japan
(13)Major shareholders and shareholding ratios 1.Moxley & Co. 6.6%

2.Japan Trustee Services Bank, Ltd. (Trust Account) 4.2%

3.State Street Bank and Trust Company 3.3%

4.The Chase Manhattan Bank, N. A. London 2.8%

5.The Mitsubishi Trust & Banking Corporation (Trust Account) 2.3%
1. Sony Corporation 61.4%

2. Sumitomo Mitsui Banking Corporation 2.3%

3. The Nichido Fire and Marine Insurance Co., Ltd. 0.7%

4. Japan Trustee Service Bank Ltd. (Trust Account) 0.7%

5. The Bank of Tokyo-Mitsubishi, Ltd. 0.6%
(14)Main banks Sumitomo Mitsui Banking CorporationThe Bank of Tokyo-Mitsubishi, Ltd.and others Sumitomo Mitsui BankingCorporation and others


(15)Business result for the most recent three years (unit: millions of yen)

Sony
Fiscal year ended on
1999/3/31
2000/3/31
2001/3/31
Net sales
2,432,690
2,592,962
3,007,584
Operating income (loss)
7,184
(2,755)
50,458
Ordinary income (loss)
46,222
30,237
81,502
Net income (loss)
38,029
30,838
45,002
Net income (loss) per share (yen)
92.72
73.09
49.18
Dividends per share (yen)
50
50
25
Shareholders' equity per share (yen)
3,993.50
3,956.68
2,021.33



Aiwa
Fiscal year ended on
1999/3/31
2000/3/31
2001/3/31
Net sales
317,690
273,112
246,837
Operating income (loss)
12,433
(6,728)
(13,334)
Ordinary income (loss)
9,737
(5,972)
(14,430)
Net income (loss)
6,721
(9,939)
(30,881)
Net income (loss) per share (yen)
101.68
(150.35)
(467.16)
Dividends per share (yen)
19
14
0
Shareholders' equity per share (yen)
904.00
819.50
347.87

(Note) Sony split its shares at the ratio of 2 shares for each share as of May 19, 2000.