OMRON Announce Notice of Subsidiary Merger.Tokyo Tokyo (tō`kēō), city (1990 pop. 8,163,573), capital of Japan and of Tokyo prefecture, E central Honshu, at the head of Tokyo Bay. , Japan, July July: see month. 28, 2005 - (JCN JCN Japan Corporate News JCN Journal of Cognitive Neuroscience JCN Journal of Cardiovascular Nursing JCN Journal of Christian Nursing JCN Job Control Number JCN Journal of Child Neurology JCN joint communications network (US DoD) Newswire) - OMRON The OMRON Corporation (オムロン株式会社 Corporation (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : 6645)(ADR ADR - Astra Digital Radio : OMRNY), a global leader in automation, sensing and control technology has decided at a board of directors meeting held today, to merge its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , OMRON Okayama Okayama (ōkä`yämä), city (1990 pop. 593,730), capital of Okayama prefecture, SW Honshu, Japan, on an inlet of the Inland Sea. It is a railroad hub and industrial and marketing center. Co., Ltd., by absorption. This merger will be implemented in line with "simple merger" procedures. 1. Object of merger Omron Corporation's internal Industrial Automation Business Company is currently strengthening its position as a globally competitive manufacturer. In this context, the merger is designed to take maximum advantage of Omron Okayama Co., Ltd.'s development and production human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , technology and expertise. Please see the attached information for details. 2. Summary of merger (1) Schedule Merger approval at board of directors meeting July 28th, 2005 Signing of merger contract September 20th,2005(scheduled) Merger approval at shareholders meeting OMRON Corporation Will not be held OMRON Okayama Co., Ltd. October 6th, 2005 (scheduled) Date of merger December 1st, 2005 (scheduled) Merger registration date December 1st, 2005 (scheduled) (Note) Pursuant to the simple merger method set forth in Article 413-3 of the Commercial Code, the merger will be completed without having to obtain approval for the merger agreement at a general shareholders' meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. of the Company. (2) Merger method The merger will be implemented by way of merger by absorption, in which OMRON Corporation will be the merging corporation and OMRON Okayama Co., Ltd. will be dissolved dis·solve v. dis·solved, dis·solv·ing, dis·solves v.tr. 1. To cause to pass into solution: dissolve salt in water. 2. . (3) Others New stock will not be issued and no money will be delivered through the merger as this is a merger with a wholly owned subsidiary. 3. Outline of each company (as of March 31st, 2005)
(1) Trading name OMRON Corporation OMRON Okayama Co., Ltd.
(Merging Company) (Predecessor company)
(non-consolidated)
(2) Description Development, Manufacturing of
of business manufacturing, control system
sales and service products for OMRON
for FA (Factory Corporation.
Automation)
systems, control
equipment,
electric
components, social
systems, traffic
systems and
others.
(3) Date of
establishment May 19th, 1948 August 31st, 1967
(4) Location of Shiokoji, 2075 Miyoshi
headquarters Horikawa, Okayama-City, Okayama
Shimogyo-ku, Prefecture 703-8502,
Kyoto 600-8530, Japan
Japan
(5) RepresentativePresident and CEO President Takuji
Hisao Sakuta Yamamoto(*)
(*) Nobuo Hamamoto has been appointed President from 16
June, 2005.
(6) Capital 64,100 million 364 million yen
yen
(7) Number of 249,121,372 728,000
shares
(8) Capital stock 212,339 million 3,486 million yen
yen
(9) Total assets 370,301 million 8,169 million yen
yen
(10) Fiscal term March 31st March 31st
(11) Number of 4,115 413
employees
(12) Main Domestic and OMRON Corporation
clients overseas
manufacturing
industries
non-manufacturing
private companies
and government
and other public
offices.
(13) Major 1.The Master Trust OMRON Corporation
shareholders Bank of Japan, Ltd. 100%
and their (trust account)
equity 8.23%
participation 2.Japan Trustee
Services Bank, Ltd.
(trust account)
7.09%
3. The Chase
Manhattan Bank
N.A., London
3.62%
4. Bank of Tokyo-
Mitsubishi, Ltd.
3.10%
5. Nippon Life
Insurance Company
2.44%
(14) Main Bank of Tokyo- Bank of Tokyo-
financing Mitsubishi, Ltd. Mitsubishi, Ltd.
bank The Bank of Kyoto, The Chugoku Bank
Ltd
Sumitomo Mitsui Sumitomo Mitsui
Banking Corporation Banking Corporation
(15) Relationship Capital ties Omron Corporation owns 100%
between the two of shares in Omron Okayama Co.,
companies Ltd.
Personal Two of Omron Corporation's
relationship Executive Directors also act
as board members at Omron
Okayama Co., Ltd.
Trade OMRON Corporation purchases
relationship control system products
manufactured by OMRON Okayama
Co., Ltd.
(16) Financial results of for the recent past 3 fiscal years
OMRON Corporation
(Merging company) (Non-consolidated)
Fiscal term Fiscal year Fiscal year Fiscal year
ending March ending March ending March
2003 2004 2005
Net sales 350,459 351,075 336,271
(millions
of yen)
Operating
income 8,166 9,787 15,305
(millions
of yen)
Ordinary
income 6,815 13,065 28,790
(millions
of yen)
Net income -10,291 6,273 18,898
(millions
of yen)
Net income
per share -41.61 25.46 78.75
(yen)
Cash
dividends
per share 10 20 24
(yen)
Equity per
share 811.99 849.76 891.45
(yen)
OMRON Okayama Co., Ltd.
(Predecessor)
Fiscal term Fiscal year Fiscal year Fiscal year
ending March ending March ending March
2003 2004 2005
Net sales 12,783 13,637 15,264
(millions
of yen)
Operating
income -1 392 350
(millions
of yen)
Ordinary
income 440 840 1,023
(millions
of yen)
Net income -392 471 603
(millions
of yen)
Net income
per share -537.79 648.31 828.13
(yen)
Cash
dividends
per share - - 414
(yen)
Equity per
share 3312.64 3960.96 4789.09
(yen)
4. Status after merger
(1) Trading name OMRON Corporation
(2) Description of business Development, manufacturing,
sales and service for FA
(Factory Automation) systems,
control equipment, electric
components, social systems,
traffic systems
(3) Location of Shiokoji, Horikawa,
headquarters Shimogyo-ku, Kyoto 600-8530,
Japan
(4) Representative President and CEO Hisao
Sakuta
(5) Capital 64,100 million yen (there will
be no capital increase as a
result of this merger)
(6) Total assets Effect on our total assets from
this merger will be minimal
(7) Fiscal term March 31st
(8) Forecast The effect to our financial
results for the fiscal year ending
March 2006 will be minimal.
Reference Material Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). IAB (1) See Internet Architecture Board. (2) (Interactive Advertising Bureau, New York, www.iab.net) An industry association founded in 1996 to set standards and guidelines for interactive advertising and marketing. Development and Production Centers for internationally competitive manufacturing Omron Corporation (TSE: 6645)(ADR: OMRNY)(President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. : Hisao Sakuta) is aiming to double its business value (compared with fiscal 2003) by the end of fiscal 2007 as part of the second stage of its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. management strategy, Grand Design 2010 (GD2010). To achieve this goal, Omron plans to develop new growth areas (to produce a 50 billion yen increase in sales compared with fiscal 2003) and establish a robust profit structure that will ensure profit growth (achieving an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 10% by the end of fiscal 2007). In line with this strategy, each internal business company has set its own targets and is implementing various policies as part of a program of continual structural reform. As part of the GD2010 second stage policies to increase business value, Omron Corporation's Industrial Automation Business (Company President: Fumio Tateisi; Internal Abbreviation abbreviation, in writing, arbitrary shortening of a word, usually by cutting off letters from the end, as in U.S. and Gen. (General). Contraction serves the same purpose but is understood strictly to be the shortening of a word by cutting out letters in the middle, : IAB) has decided to restructure its global production and development centers as outlined below, in order to further enhance its presence as a globally competitive manufacturer in the rapidly-changing IA (industrial automation) market. Outline of Restructuring IAB, our main business, is accelerating new product development and strengthening core technologies to realize greater production efficiency. At the same time, it is boosting cost competitiveness in a drive to further enhance its position as a globally competitive manufacturer. These policies are aimed at achieving IAB's GD2010 second stage commitment to realize an operating margin of 20% by fiscal 2007 (in existing and Greater China region; excluding new regions). As one of its concrete measures to this end, IAB is shifting domestic production functions from Japan to Omron (Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. ) Co., Ltd. (internal abbreviation: OMS OMS - Opportunity Management System ), an existing subsidiary. In addition, the development and production functions of its Mishima Mishima (mē`shēmä), city (1990 pop. 105,418), Shizuoka prefecture, central Honshu, Japan. It is a hot-spring resort, a transportation hub, and a center for dairy processing and mechanical, textile, and paper industries. factory, Okayama Development Center, Omron Okayama Co., Ltd., and the manufacturing technology function of Keihanna Innovation Center will be integrated into Kusatsu Kusatsu may refer to:
As a result of this restructuring and the shift of production functions to its Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. manufacturing subsidiary, OMS, by fiscal 2007, IAB's production capacity at the post-integration Kusatsu Factory is expected to equal approximately 80% of total current capacity at Mishima Factory and Omron Okayama Co., Ltd. The post-integration Kusatsu factory, along with the facilities at Okayama and Mishima will be positioned as the global nucleus nucleus, in physics nucleus, in physics, the extremely dense central core of an atom. The Nature of the Nucleus Composition for concurrent At the same time. It implies that multiple processes are taking place simultaneously. See concurrent operation. engineering (in which development and production departments collaborate in new product development), core manufacturing technology development and its application, as well as quality control and technology servicing. 600 staff will be assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to Kusatsu Factory by fiscal 2007, making it IAB's largest domestic development/production base in terms of manpower. Aim of Restructuring This restructuring is designed to accelerate new product development and strengthen core technologies for realizing greater production efficiency, as well as boosting IAB's cost competitiveness and enhancing its position as a globally competitive manufacturer. Domestically, the restructuring will allow IAB to continue strengthening its development system in order to facilitate the early generation of new, potentially major products, and the core manufacturing technological capabilities that drive OMS' cost competitiveness. The details are outlined below. 1. Acceleration of New Product Development by Strengthening Concurrent Engineering IAB will speed up the product development process by further enhancing its concurrent engineering, in which development and production departments work together on new product development. Specifically, by combining the manufacturing expertise from Mishima Factory's major product, program controllers, and Omron Okayama Co., Ltd.'s main product, temperature controllers, along with the product technology resources from Okayama Development Center, IAB aims to accelerate the development of new products that meet clients' needs. 2. Realizing highly efficient production by strengthening core manufacturing technology IAB's manufacturing technology department, currently in Keihanna Innovation Center, will be transferred to Kusatsu Factory, thus integrating development and production departments. This will accelerate development of core manufacturing technologies (high reliability surface mounting technology, demand-driven, mixed-model synchronized syn·chro·nize v. syn·chro·nized, syn·chro·niz·ing, syn·chro·niz·es v.intr. 1. To occur at the same time; be simultaneous. 2. To operate in unison. v.tr. 1. production technology/machinery etc) and their application on the factory floor. As a result of this restructuring, core manufacturing technologies will be developed at Kusatsu Factory, and then deployed throughout IAB's production bases including our Chinese subsidiary, OMS. This represents Omron Corporation's commitment to utilizing the core manufacturing technology accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. in the group companies in order to develop new products. 3. Boosting Cost Competitiveness Alongside the strengthening of core technological capabilities, IAB plans to expand its business in China and grow global profits by effectively differentiating its highly efficient production and products, and enhancing its design and production centers in China. A cost structure that can be adapted to the Chinese market and the foundations for expanding Chinese business are already under development at OMS, and IAB plans to go on to implement round-the-clock demand-driven, mixed-model synchronized production. Domestic production of general purpose products will continue to be shifted to China. Investment in Restructuring As part of this series of restructuring measures, the company will invest a total of 10 billion yen (5 billion yen in China, 5 billion yen in Japan) to upgrade each center's infrastructure and core manufacturing technology development. Financial Goals of Restructuring IAB expects to reduce fixed manufacturing costs by more than 9 billion yen (including depreciation on the investment mentioned above) every year from fiscal 2007 onwards on·ward adj. Moving or tending forward. adv. also on·wards In a direction or toward a position that is ahead in space or time; forward. Adv. 1. through this series of restructuring measures. As a result, it expects to achieve an operating margin of 20% for fiscal 2007 (in existing and Greater China region; excluding new regions). Positioning of Okayama and Mishima facilities after restructuring As a result of this restructuring, our Okayama facility will be positioned as Omron Corporation's evaluation/analysis base, and purchasing/procurement base. Our Mishima facility will be positioned as IAB's customer service base. Both Mishima and Okayama will continue to play important roles in strengthening global core functions. Outline of Omron Okayama Co., Ltd. Location: 2075 Miyoshi Okayama City, Okayama Prefecture, Japan IAB business: Manufacture of temperature controllers, power supplies, timers, counters etc. Outline of Okayama Development Center Location: 2075 Miyoshi Okayama City, Okayama Prefecture, Japan IAB business: Development of temperature controllers, power supplies, timers, counters etc. Outline of Mishima Factory Location: 66 Matsumoto Matsumoto (mäts  mō`tō), city (1990 pop. 200,715), Nagano prefecture, central Honshu, Japan. It is a market for silkworms and raw silk. Mishima City, Shizuoka Shizuoka (shĭz `ôkä), city (1990 pop. 472,196), capital of Shizuoka prefecture, E central Honshu, Japan, on Suruga Bay. Prefecture, JapanIAB business: Development and production of programmable controllers Programmable controllers Electronic computers that are used for the control of machines and manufacturing processes through the implementation of specific functions such as logic, sequencing, timing, counting, and arithmetic. , inverters, servomotors, networking equipment etc. Outline of Keihanna Innovation Center Location: 9-1, Kizugawadai, Kizu-cho, Soraku-gun, Kyoto Kyoto (kyō`tō), city (1990 pop. 1,461,140), capital of Kyoto prefecture, S Honshu, Japan, on the Kamo River. Yodo is its port. Kyoto is one of Japan's largest cities and an important cultural and spiritual center. , Japan IAB Business: Development of core manufacturing technology and precise inspection core technology Outline of Kusatsu Factory Location: 2-2-1 Nishi-Kusatsu, Kusatsu-City, Shiga Shiga (shē`gä), prefecture (1990 pop. 1,222,401), S Honshu, Japan. Otsu (the capital) and Hikone are the chief cities. It is predominantly an agricultural region, with rice the principal crop. Prefecture, Japan IAB Business: None at present. Outline of Omron (Shanghai) Co. Ltd. (OMS) Location: No.789 Jinji
Shanghai, 201206, China IAB Business: Development and production of programmable controller, sensors
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