Hewlett-Packard Japan to Become Wholly Owned HP Subsidiary; HP and YOKOGAWA Sign Agreement.

PALO ALTO, Calif.--(BUSINESS WIRE)--July 6, 1999--

Hewlett-Packard Company (HP) and Yokogawa Electric Corporation (YOKOGAWA) today announced an agreement whereby Hewlett-Packard Japan (HPJ) will become a 100-percent-owned HP subsidiary. Currently, HP owns 75 percent and YOKOGAWA owns 25 percent of the outstanding shares of HPJ.

HPJ was founded in 1963 under the name of Yokogawa-Hewlett-Packard Company (YHP), as a joint venture between HP and YOKOGAWA, with YOKOGAWA owning 51 percent and HP 49 percent.

HPJ, or YHP, as it was then known, provided YOKOGAWA with a strong position in the high-frequency-measurement business in Japan at an early stage in the development of this market. From HP's perspective, YHP provided an excellent bridgehead into the growing Japanese market. Combining the two companies' resources in a joint venture leveraged their respective strengths.

The company was formed to manufacture and market HP's measuring instruments in Japan, and it grew rapidly as HP's business broadened and diversified to include computers and printers. The company also developed products of its own that were marketed worldwide through the HP sales and support channels.

As a result of the business growth and diversification, the two parent companies agreed to change the ownership structure of YHP in 1983, at which time HP became the majority owner of the company. Both parent companies are very proud of the success that the company has achieved, which has resulted in HPJ being perceived as one of the most admired joint ventures in Japan.

HP recently announced that it intends to restructure its worldwide businesses into two new companies to better address the need for increased agility, focus and accountability in its businesses. After sincere and open discussion between the senior management of the two companies, YOKOGAWA fully agrees with HP's view that this restructuring requires HPJ to align its structure with that of HP. In this light, YOKOGAWA has agreed to make HPJ a wholly owned subsidiary of HP. Both parent companies think that HPJ has successfully completed its original mission and that now is the right time for it to move into the new era with renewed spirit.

It is the sincere desire of both HP and YOKOGAWA to maintain their wide range of business alliances, which are the outcome of their 36-year relationship. For example, HP supplies computers to YOKOGAWA, and YOKOGAWA supplies printer power supplies to HP.

Yokogawa Analytical Systems (YAN), which was established as a separate joint venture between the two companies in 1992 to serve customers in chemical-analysis fields, will continue with its current business charter.

The management of Hewlett-Packard Company and Yokogawa Electric Corporation fully believe this new direction for HPJ is in the best interests of their shareholders worldwide.

About Yokogawa Electric Corporation

Founded in 1915, Yokogawa Electric Corporation is one of the world's leading suppliers of solutions to industries and enterprises. In October 1997, Yokogawa ushered in a new business concept, announcing it would become a provider of enterprise technology solutions that encompass resource management information, manufacturing execution information, and production control.

The company is dedicated to promoting the quality, efficiency, and profitability of enterprise customers around the globe by providing total solutions in addition to supplying the most reliable leading-edge instruments and control systems.

Yokogawa's facilities in Japan, consisting of 3 factories, 21 offices and 69 affiliates, are complemented by a global network that extends throughout Asia, North and South America, Europe, Africa and Oceania. Our strong presence all over the world includes 17 factories, 61 affiliates in 25 countries and over 150 sales and engineering offices.

About HP

Hewlett-Packard Company -- a leading global provider of computing and imaging solutions and services for business and home -- is focused on capitalizing on the opportunities of the Internet and the proliferation of electronic services.

HP had computer-related revenue of $39.5 billion in its 1998 fiscal year.

HP plans to launch a new company consisting of its industry-leading test-and-measurement, semiconductor products, chemical-analysis and medical businesses. These businesses represented $7.6 billion of HP's total revenue in fiscal 1998. With leading positions in multiple market segments, this technology-based company will focus on opportunities such as communications and life sciences.

HP has 123,000 employees worldwide and had total revenue of $47.1 billion in its 1998 fiscal year. Information about HP, its products and the company's Year 2000 program can be found on the World Wide Web at http://www.hp.com.