Pioneer and Tohoku Pioneer Announce Making Tohoku Pioneer a Wholly-Owned Subsidiary of Pioneer through Share Exchange.

Tokyo, Japan, July 31, 2007 - (JCN Newswire) - Pioneer Corporation (TSE: 6773) and Tohoku Pioneer Corporation (TSE: 6827) announced that they resolved at their respective meetings of the board of directors held today to make Tohoku Pioneer a wholly-owned subsidiary of Pioneer as of October 1, 2007 through a share exchange.

Both Companies intend to develop Tohoku Pioneer as a core company in the Pioneer Group in relation to the production of car stereos and speakers with higher aspirations for competitiveness and profitability in order to further reinforce market superiority in the "Car Electronics business" and "Home Electronics business", which are the core businesses of the Pioneer Group. To reach this goal, Both Companies plan to undertake a dynamic reorganization of their resources, which include technology resources, production capacity, intellectual property, and manufacturing know-how of the Pioneer Group, and to restructure their businesses.

With respect to such reorganization and restructuring, both Companies concluded that the Pioneer Group needs, now more than ever, to promptly make decisions and to flexibly and efficiently implement strategies. Therefore, Pioneer announced on May 14, 2007 its plan to make Tohoku Pioneer a wholly-owned subsidiary through a Tender Offer for the shares and the stock acquisition rights of Tohoku Pioneer and a series of subsequent procedures. Tohoku Pioneer believed that becoming a wholly-owned subsidiary of Pioneer would now more than ever enable it to promptly make decisions, flexibly and efficiently implement strategies and maximize group synergies and would also be the best course in respect of Tohoku Pioneer's medium to long-term growth and development and maximizing Tohoku Pioneer's corporate value.

Pioneer conducted a tender offer during the period from May 15, 2007 through June 19, 2007 to acquire all of the issued and outstanding shares and the stock acquisition rights of Tohoku Pioneer (except for the shares of Tohoku Pioneer already held by Pioneer and treasury stock held by Tohoku Pioneer). As a result, Pioneer currently holds 97.56% of the aggregate number of the issued shares (19,557,485 shares) of Tohoku Pioneer.

Since Pioneer could not acquire all of the issued and outstanding shares of Tohoku Pioneer through the Tender Offer, both Companies decided to implement the Share Exchange between Pioneer and Tohoku Pioneer with Pioneer's common stock as consideration to make Tohoku Pioneer a wholly-owned subsidiary of Pioneer. The effective date of the Share Exchange will be October 1, 2007. Today, the details of the Share Exchange were resolved at respective meetings of the board of directors of Both Companies and the share exchange agreement was executed.

As a part of the above reorganization and restructuring, Both Companies plan to integrate Tohoku Pioneer's speaker business with Pioneer's speaker business, and thereafter, Pioneer will take charge of planning and sales, while Tohoku Pioneer will take charge of technology (R&D) and production. Since the establishment of Pioneer, manufacturing and sales of speakers have been important, being the core of Pioneer's audio business. Demand for high-grade speakers has increased, not only in the field of traditional household-use and car audio equipment, but also mobile telephones and personal computers.

In connection with the above, Pioneer Group has rolled out its production and R&D capabilities in Japan, North America, Asia and China. Following the above business integration, Both Companies will jointly work on restructuring their respective technology (R&D), production and sales systems in Japan and overseas, in order to efficiently use the resources and further strengthen the competitiveness of the Pioneer Group.

As a result of the Share Exchange, Pioneer will be the wholly owning parent company of Tohoku Pioneer as of the effective date of October 1, 2007 and the common stock of Tohoku Pioneer which will be a wholly-owned subsidiary will be delisted from the Tokyo Stock Exchange on September 25, 2007 (the final date of trading will be September 21, 2007) in accordance with the criteria for delisting of stock of the Tokyo Stock Exchange, Inc. After the delisting, shares of Tohoku Pioneer will not be traded on the Tokyo Stock Exchange.

Since Pioneer holds more than 90% of the voting rights of all the shareholders of Tohoku Pioneer, as a measure for securing the fairness of the share exchange ratio for the Share Exchange, both Companies separately requested independent third party evaluation institutions to calculate the Share Exchange Ratio and received the results. After negotiations and consultations between Both Companies, both Companies unanimously resolved to execute the share exchange agreement including the Share Exchange Ratio at the respective meetings of the board of directors of both Companies held today based on the calculation results of the Share Exchange Ratio rendered by the third party evaluation institutions.

In addition, all corporate auditors of both Companies including the outside corporate auditors stated that they endorsed the resolution of the board of directors of the company for which they serve as corporate auditors. Further, from the perspective of preventing conflicts of interest, the two directors among the directors of Tohoku Pioneer who are also an executive officer or employee of Pioneer did not participate in the discussion and resolution at the above meeting of the board of directors of Tohoku Pioneer. No director or corporate auditor of Pioneer serves concurrently as a director, corporate auditor or executive officer of Tohoku Pioneer.

Please access the full Share Exchange documentation at http://pioneer.jp/press/pdf/topec_070731-e.pdf

About Pioneer Corporation

Pioneer Corporation is one of the leading manufacturers of consumer and business-use electronics products such as audio, video and car electronics on a global scale. Its shares are traded on the Tokyo Stock Exchange. For more information , please visit http://pioneer.jp.

Source: Pioneer Corporation

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