Fujitsu and Siemens Join Forces to Create Major Computer Power; Global Co-operation Aims to Achieve Top 3 Position in Worldwide Computer Market.

TOKYO and BONN, Germany--(BUSINESS WIRE)--June 17, 1999--

Fujitsu Limited and Siemens AG today announced that they have signed a Memorandum of Understanding to create a far-reaching co-operation that significantly expands their joint activities in the worldwide computer market. As part of this, the two companies will merge most of their European computer operations and establish a joint-venture company - Fujitsu Siemens Computers - to develop, manufacture and market a full range of information products. Capitalizing on the complementary strengths of each partner, an extensive development and mutual supply arrangement will be established between the two partners and their group companies around the world. Through these measures, Fujitsu and Siemens aim to jointly capture a top 3 industry position within the combined worldwide markets for personal computers, Intel based and UNIX servers and large-scale enterprise systems. Together, the sales of the two organizations in these markets already place them at number 5 in the world. The new co-operation, which builds on a close Fujitsu-Siemens relationship cultivated over more than two decades of technological exchange and strategic business collaboration in the computer field, will greatly enhance their ability to win and service major global IT accounts.

"The joint venture between Siemens and Fujitsu is a further important step in the implementation of our Ten-Point Program to achieve sustainable growth in profitability," stated Siemens CEO  Dr. Heinrich v. Pierer. "Following the merger of our Information and Communications segments and the expansion of our Internet activities, we are now strengthening our competitive position in the strategically important field of computer systems. This new worldwide co-operation will give us a leading position in this rapidly growing market. We are now able to offer computer products to all customers around the globe."

"Fujitsu has been devoting great effort to services and software in order to meet customer requirements in the Internet Age, but at the same time we recognize that a successful solutions business requires that we have the most competitive products and technologies," said Fujitsu Limited president Naoyuki Akikusa. "The agreement we are announcing today demonstrates our commitment to providing customers around the world with IT solutions supported by a complete range of best-of-breed platforms. The collective development, manufacturing, sales and distribution capabilities of our two companies together with increased efficiency and economies of scale will give Fujitsu Siemens Computers a tremendous competitive advantage in Europe and be a great asset to the Fujitsu Group worldwide."

According to the Memorandum of Understanding, Fujitsu and Siemens will each hold a 50% equity stake in the new company, with equal representation on its Board of Directors. Fujitsu Siemens Computers will combine the current operations of Fujitsu Computers (Europe) Ltd. and Siemens Computer Systems, including development, manufacturing and marketing. Siemens' Computer Systems Division today represents revenues of some 4 billion Euros with roughly 8,000 employees; Fujitsu Computers (Europe) Ltd. has annual revenues of about 2 billion Euros and 1,600 employees. In accordance with international accounting standards, the joint venture will be accounted for by both companies under the applied equity method. Detailed arrangements about the new co-operation are currently being worked out, and the companies expect to soon complete a definitive agreement based on the Memorandum of Understanding. Consultation with employee representatives and the appropriate industry and trade bodies is now in progress, both at an individual country level and on a pan-European basis. Pending successful completion of these consultations and required regulatory approvals, the new company is expected to begin operations on October 1, 1999.

The combined size of the operations will at once place Fujitsu Siemens Computers within the top 3 revenue position in the European computer market comprising PCs, Intel based and UNIX servers and mainframes, and in the number 2 position in terms of market shipments. FY2000 revenues are expected to exceed 7.6 billion Euros, with unit volumes projected to include approximately 4.8 million PCs, 180,000 Intel based servers and 5,000 enterprise-level UNIX servers.

Fujitsu Siemens Computers will offer a comprehensive product range, from ultra-light, state-of-the-art notebooks through to mission critical enterprise server and mainframe systems. By combining their resources, Fujitsu and Siemens will be better able to supply customers and channel partners with the most competitive offerings in terms of technology, time-to-market and price/performance. The new venture also promises customers and business collaborators to be a strong partner for future growth, with all the benefits that come with working with one of the largest enterprises in the world. -0-

                      New Company Profile

                   Name: Fujitsu Siemens Computers
    Operations start-up: October 1, 1999
           Shareholders: Fujitsu Limited (50%), Siemens AG (50%)
              Employees: Approx. 9,600
          Fiscal period: April 1 - March 31
        Projected sales: Over 7.6 billion Euros in FY2000
    Scope of operations: Development, manufacturing and sales of
                          information products
        Product line-up: Mobile computers, personal computers,
                         Intel architecture servers, UNIX servers,
                         BS2000 mainframes, supercomputers