Merger of Furukawa Elecom Co., Ltd. and Shin Manden Co., Ltd.

January 15, 2013

On April 1, 2013, Furukawa Elecom Co., Ltd. (Head office: 2-16-8 Uchi-Kanda, Chiyoda-ku, Tokyo; President: Michio Suzuki; wholly owned subsidiary of Furukawa Electric Co., Ltd.; hereinafter “the Company”) will merge with Shin Manden Co., Ltd., (hereinafter “Shin Manden”), a wholly owned subsidiary of the Company.

In the Medium-Term Management Plan for the next term (the period ending March 2014), the Furukawa Electric Group is implementing a review of its business structure to improve profitability, and this merger is a part of that review.

Purpose and Background

Although we have seen a slight recovery in the domestic market for construction and electrical appliances handled by the Company and Shin Manden, the outlook is for an annual growth rate of only around 1%. With no major developments expected, we are required to make further efficiency drives and to reinforce selling power.

Under these circumstances, efforts are underway to improve convenience for customers by implementing reforms and reorganization of the sales structure, developing robust sales efficiencies, and boosting both sales capabilities and competitiveness on the market.

Consolidating Sales Offices and Taking over the Functions and Commercial Rights of Shin Manden

As part of the efficiency drive, we will consolidate sales offices, but we will continue to provide support at offices nationwide after the merger. Specifically, the Shin Manden head office (Osaka), the Tokyo branch, the Chubu branch, the Chugoku brand, the Kyushu branch and the Sapporo sales office will be integrated with existing business offices at the Company. As a result, the number of offices will decrease from 19 to 13 offices after the integration.
In addition, the Company will take over all functions and commercial rights of Shin Manden.

Outline of the Integrated Company

Company Name Furukawa Elecom Co., Ltd.
Head Office Furukawa Denko Kanda Bldg., 2-16-8 Uchi-Kanda, Chiyoda-ku, Tokyo
Representative Michio Suzuki (planned)
Paid-in Capital ¥98,750,000 (100% investment by Furukawa Electric Co., Ltd.)
Employees About 220 persons (planned)
Sales Offices Tokyo (head office), Sapporo, Sendai, Toyama, Nagano, Utsunomiya, Numazu, Shizuoka, Nagoya, Osaka, Hiroshima, Fukuoka, Naha
Business Scale ¥41 billion/year