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April 23, 2003



Announcement of Merger of Subsidiary

Sony Corporation ("Sony") has decided to absorb its wholly-owned subsidiary SMEJ Inc. by a merger and today signed the merger agreement.

1-a. Background

Sony Music Entertainment (Japan) Inc. divided its group businesses into music related and non-music related and established two subsidiary companies to oversee the two domains as of April 1, 2003. The purpose of this was to quickly respond to the transformation of the music industry as well as to further strengthen and expand both of its business domains. Sony Music Entertainment Inc.(Japan) changed its company name to SMEJ Inc. also effective April 1, 2003. The name, Sony Music Entertainment (Japan) Inc., has been adopted as the company name for the music related subsidiary company.

1-b. Purpose of Merger

Upon completion of the absorption, the shareholdings of SMEJ Inc.'s current two subsidiary companies and SMEJ Inc.'s shareholdings of other Sony Group sister companies will be consolidated into Sony Corporation. In this manner, Sony will strive to further link and strengthen these businesses within the total Sony Group.

2. Conditions of the merger, etc.
(1) Schedule of the merger
April 22, 2003 (Tuesday) Board meeting to approve merger agreement
April 23, 2003 (Wednesday) Conclusion of merger agreement
May 12, 2003 (Monday) Shareholders meeting to approve merger agreement (SMEJ)
July1, 2003 (Tuesday) Effective date of merger
July1, 2003 (Tuesday) Official registration of merger
*Pursuant to the provisions of Clause 3 of Article 413 of the Commercial Code of Japan, Sony shall perform the merger with SMEJ without the approval of the merger agreement by its shareholders.

(2) Method of the merger
Sony, as an ongoing concern, shall absorb SMEJ, which shall be subsequently dissolved.

(3) Others
Due to the fact that SMEJ is a wholly-owned subsidiary of Sony, there shall be no issuance of new shares or cash payment upon this merger.

3. Summary of Parties
(1) Trade name Sony Corporation SMEJ Inc.
(2) Field of business Manufacture and sale of electronic and electrical machines and equipment Investment in company planning, producing, manufacturing and selling music and visual software
(3) Date of incorporation May 7, 1946 March 1, 1968
(4) Location of head office 7-35, Kitashinagawa 6-chome, Shinagawa-ku, Tokyo 4-5, Rokubancho Chiyoda-ku, Tokyo
(5) Representative Nobuyuki Idei, Representative Director Eiji Kishi, Representative Director
(6) Share capital ¥476,224 million ¥49,660 million
(7) Total number of shares issued and outstanding 922,918,991 shares 108,179,321 shares
(8) Shareholders' equity ¥1,886,389 million ¥157,076 million
(9) Total assets ¥3,615,038 million ¥216,060 million
(10) Date of settlement March 31 March 31
(11) Number of employees 16,836 0
(12) Major customers Affiliated manufacturing and sales companies in and outside Japan Sony Corporation
(13) Major shareholders and shareholding ratios 1 Moxley & Co. 6.1%
2 Japan Trustee Services Bank,Ltd. (Trust Account) 4.4%
3 The Master Trust Bank of Japan, Ltd. (Trust Account) 3.3%
4 The Chase Manhattan Bank,N. A. London 2.9%
5 State Street Bank and TrustCompany 2.8%
Sony Corporation 100%
(14) Main banks Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi, Ltd.and others
Sumitomo Mitsui Banking Corporation
(Note) The above data for Sony are as of September 30, 2002. The above data for SMEJ are as of March 31, 2003 except for the number of employees, which is as of April 1, 2003.

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

Sony Corporation
SMEJ Inc.
Fiscal year ended on 2000/3/31 2001/3/31 2002/3/31 2000/3/31 2001/3/31 2002/3/31
Net sales
2,592,962
3,007,584
2,644,195
118,215
102,887
75,601
Operating income
(2,755)
50,458
(52,994)
4,950
10,637
1,691
Ordinary income
30,237
81,502
(6,122)
8,094
12,708
4,327
Net income
30,838
45,002
29,635
6,361
1,503
377
Net income per share (yen)
73.09
49.18
32.22
58.80
13.90
3.49
Dividends per share (yen)
50.00
25.00
25.00
35.00
0
338.18
Shareholders' equity per share (yen)
3,956.68
2,021.33
2,024.10
2,071.52
2,069.85
1,795.43
(Note) Sony split its shares at the ratio of 2 shares for each share as of May 19, 2000.

4. Circumstances after the merger
(1) Trade name Sony Corporation
(2)Field of business Manufacture and sale of electric and electrical machines and equipment
(3) Location of head office 7-35, Kitashinagawa 6-chome, Shinagawa-ku, Tokyo
(4) Representative Nobuyuki Idei, Representative Director
(5) Share capital Upon this merger the amount of share capital shall not change.
(6) Total assets This merger will not have a material impact on total assets.
(7) Date of settlement March 31
(8) Effect on business results This merger will not have a material impact on Sony's consolidated results.