Konica Minolta Issues Notice Of Reorganization

[Anonymous]

Konica Minolta Issues Notice Of Reorganization

Notice Regarding Reorganization in the Group Management System (Simplified Merger with Consolidated Subsidiary), Change of Trade Name and Partial Revision of Articles of Incorporation

Company Name: Konica Minolta Holdings, Inc.
Representative Name: Masatoshi Matsuzaki, President and CEO
Tokyo (October , 2012) – Konica Minolta Holdings, Inc. ("the Company") today announced that its Board of Directors determined at a meeting held today that seven companies in the Group, including Konica Minolta Business Technologies, Inc., will be merged with the Company in a reorganization of management system, that the Company’s trade name will be changed from Konica Minolta Holdings, Inc. to Konica Minolta, Inc., and that the Articles of Incorporation will be revised so that the Company will be able to run businesses.

Because the transaction is a simplified absorption-type merger of wholly-owned subsidiaries, some of the matters and contents are omitted from this disclosure.

1. Reorganization in the management system of the Group (1) Reason and purpose of the reorganization in the management system of the Group

Since the management integration in August 2003, the Group has operated in the framework of splitting businesses under the Company as holding company. Konica Minolta has strived to maximize the synergies from the integration by concentrating the management resources into fields that can take most advantage of its competitive edges and focusing on the expansion in the portfolio and scale of the Group’s core Business Technologies business. Over these years, Konica Minolta has not only gained top-tier position in the overseas color market in the Office segment but also built on the Production Print segment into 100 billion yen business through prioritized development and enhancement. In addition, in the fields of materials and equipment for industrial use, the Group has fully utilized its advanced technologies in developing and strengthening its unique sectors, such as thin plain TAC films for LCD polarizers, and expanded the scale of business. Meanwhile the Company made decision to end the Photo Imaging business including cameras and photo-sensitized materials in the fiscal year ended March 2006, followed by the ending of graphic film production and integration of the remaining graphic-imaging-related divisions into the Business Technologies business in the fiscal year ended March 2011.

This reorganization of the Group’s management system will further speed up various initiatives to increase corporate value and is designed to achieve "innovative management capabilities in the Business Technologies business," "strategic and agile utilization of management resources," and "systems to support efficient operation."

i) Innovative management capabilities in the Business Technologies business
The Business Technologies business, which accounts for about 70 percent of the Group’s net sales, will be reorganized into a new structure with direct management involvement by the Company and further strengthen its innovative ability to upgrade the quality of business process and administrative efficiency so that it will keep transforming the portfolio of business, while driving growth and profitability.

ii) Strategic and agile utilization of management resources
This reorganization will clear a path for a system to align organizations and assign human resources strategically and with higher agility. That will help accelerate growth in emerging and promising fields such as OLED (Organic Light Emitting Diode) lighting, other functional films and industrial inkjet businesses, as well as stepping up efforts to implement changes in segments that need to drive profitability growth.

iii) Systems to support efficient operation
While keeping merits of the split-business structure, the reorganization will address inefficient process seen in the split businesses and weakened organizational strength from dispersed functions. Corporate functions which support each business across the Group will be further enhanced.

The corporate governance structure based on a "company-with-committees system," that has enabled the Group to ensure transparency and soundness of the management, is to stay. Along with the reorganization in the management system announced today, Konica Minolta will continue generating higher corporate value and shareholder value.

(2) Summary of reorganization in the management system of the Group
(See Attachment 1: Scope of absorption-type merger)

i) The Company will merge Konica Minolta Business Technologies, Inc. in a simplified absorption-type merger to manage the Business Technologies business and the Group through fusion and enhancement of the organization of the two companies.

ii) Konica Minolta Advanced Layers, Inc., Konica Minolta Optics, Inc., and Konica Minolta Medical & Graphic, Inc. will be merged with the Company in a simplified absorption-type merger. The three companies will become "internal companies" with business promotion functions including development, production and sales.

iii) Konica Minolta IJ Technologies, Inc. will be merged with the Company in a simplified absorption-type merger and become a business unit.

iv) Two Common Function Companies of the Group, Konica Minolta Technology Center, Inc. and Konica Minolta Business Expert, Inc., will be merged with the Company. The management resources of the two companies will be re-allocated to support technical development and operation of businesses in the Group.

(3) Summary of the merger

i) Schedule of the merger

Approval by Board of Directors (The Company)	October 10, 2012
Approval by Board of Directors (Consolidated Subsidiaries)	October 11, 2012 (planned)
Execution of Agreement	October 11, 2012 (planned)
Effective Date of Merger	April 1, 2013 (planned)

Note: The Company will conduct the transaction of merger as simplified merger that does not require approval of the shareholders meeting of the Company under Article 796, paragraph 3 of Companies Act of Japan. The consolidated subsidiaries will conduct the transaction of merger as short form merger that does not require approval of their shareholders meetings under Article 784, paragraph 1 of Companies Act of Japan.

ii) Method of the merger
The transaction is an absorption-type merger in which the Company is the surviving company.

iii) Allotment of shares relating to the merger
Because the Company owns all issued shares of the seven consolidated subsidiaries subject to the merger, no shares, cash or other assets will be allotted in relation to the merger.

iv) Treatment of stock acquisition rights and bonds with stock acquisition rights as a result of the merger
No changes are expected to the stock acquisition rights or bonds with stock acquisition rights issued by the Company.

(4) Summary of parties in the merger

See Attachment 2.

(5) Conditions of the Company after the merger

1. Trade name: Konica Minolta, Inc.

2. Location of head office: 2-7-2, Marunouchi, Chiyoda-ku, Tokyo

3. Title and name of representative: Masatoshi Matsuzaki, President and CEO (planned)

4. Description of business
– Development, manufacturing and sale of multi-functional peripherals (MFPs), printers, equipment for production print systems and graphic arts, equipment for healthcare systems, measuring instruments for industrial and healthcare applications, inkjet printheads and textile printers for industrial use, and related consumables and solution services

– Development, manufacturing and sale of electronic materials (including TAC films), lighting source panels, functional films (including heat insulation films), and optical products (including lens units)

5. Capital: ¥37,519 million

6. Fiscal year-end: March 31

(6) Outlook

As the transaction is an absorption-type merger of the wholly-owned subsidiaries, no material impact is expected on the Company’s consolidated financial results of the year ending March 31, 2013. Should it become clear that the merger may have material impact on its consolidated financial results, the Company will notify promptly.

Although Konica Minolta Business Technologies, Inc., Konica Minolta Advanced Layers, Inc. and Konica Minolta Technology Center, Inc. are currently significant subsidiaries, they will no longer be significant subsidiaries when they become extinct through the merger.

2. Change in the trade name

(1) Reasons for the trade name change
Through the merger, the Company will be an operating company, instead of pure holding company. Accordingly the trade name is changed on the date of the merger, April 1, 2013.

(2) New trade name
KONICA MINOLTA, INC.

(3) Planned date to change the trade name
April 1, 2013

(4) The change in the trade name will be implemented after the approval at the extraordinary meeting of shareholders, scheduled on December 11, 2012.

3. Partial revision of Articles of Incorporation

(1) Purpose of change
Through the merger, the Company will be an operating company, instead of pure holding company. Accordingly the Articles of Incorporation will be partially revised on the date of the merger, April 1, 2013.

(2) Revision
See Attachment 3.

(3) Schedule
Extraordinary meeting of shareholders is scheduled on December 11, 2012

(4) Effective date of revision
April 1, 2013

(5) The revision will be implemented after the approval at the extraordinary meeting of shareholders, scheduled on December 11, 2012.

Attachment 1: Scope of absorption-type merger

Note: Other than the above, Konica Minolta Holdings, Inc. owns Konica Minolta Holdings U.S.A., Inc. (holding company in the U.S.) and Konica Minolta (CHINA) INVESTMENT Ltd. (holding company in China), as its subsidiaries.

Attachment 2: Overview of the parties in the merger Company surviving merger

1. Trade name	Konica Minolta Holdings, Inc.
2. Location of head office	2-7-2, Marunouchi, Chiyoda-ku, Tokyo
3. Title and name of representative	Masatoshi Matsuzaki, President and CEO
4. Description of business	Pure holding company (drafting and implementation of group management strategies, as well as supervising, managing and coordinating group management)
5. Capital	¥37,519 million
6. Date of incorporation	December 22, 1936
7. Number of shares issued	531,664,337 shares
8. Fiscal year-end	March 31
9. Major shareholders (as of March 31, 2012)	1. Japan Trustee Services Bank, Ltd. (Trust account)		6.8%
	2. The Master Trust Bank of Japan, Ltd. (Trust account)		5.5%
	3. The Bank of Tokyo-Mitsubishi UFJ, Ltd.		2.6%
	4. State Street Bank and Trust Compan

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October 16, 2012 at 7:23 AM