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KOMAG AND ASAHI GLASS SIGN DEFINITIVE AGREEMENT TO FORM JOINT VENTURE FOR THIN-FILM HEADS

 KOMAG AND ASAHI GLASS SIGN DEFINITIVE AGREEMENT TO
 FORM JOINT VENTURE FOR THIN-FILM HEADS
 MILPITAS, Calif., Dec. 20 /PRNewswire/ -- Komag Inc. (NASDAQ: KMAG) the leading non-captive supplier of sputtered thin-film disks for high-performance Winchester disk drives, today signed a definitive agreement with Asahi Glass Co. Ltd., one of its key strategic business partners, to form a joint venture to participate in the rapidly growing market for thin-film recording heads. The definitive agreement has been approved by both companies and is subject only to certain regulatory approvals and other customary closing conditions. The receipt of such approvals and the closing of the joint venture are expected before the end of January 1992. Also today in a separate press release, Komag announced the completion of a previously planned merger with Dastek Inc., a privately held manufacturer of thin-film recording heads.
 At the closing, Komag will contribute to the joint venture both the stock of Dastek Inc., its recently acquired wholly owned subsidiary, and the assets of its existing thin-film head development program. This development program is based on advanced technology previously acquired from Siemens AG in 1990. Asahi Glass Co. Ltd. in turn will contribute nearly $60 million in equity capital to the joint venture. Asahi's equity contribution will be in the form of $36 million in cash at closing and two discounted notes with principal and accrued interest payable in two installments of $12 million each on Dec. 31, 1992 and 1993. Based on these contributions, Komag and Asahi will have economic interests in the joint venture of 60 percent and 40 percent, respectively. Given its majority ownership interest, Komag will fully consolidate the operating results of the joint venture with appropriate adjustments for Asahi's minority interest.
 The joint venture will conduct its research, manufacturing and marketing activities worldwide under the Dastek name. Responsibility for daily operations will rest with Dastek management and certain Komag personnel who will be joining the Dastek organization. In addition, Asahi will assign engineering, manufacturing and managerial personnel to support the operations of the joint venture. Asahi Glass Co. Ltd. will also distribute Dastek's thin-film head products in Japan. Both Komag and Asahi will continue to conduct independent research in thin-film technology.
 "There are many demanding technical, marketing and manufacturing challenges in creating a successful thin-film head business," noted Stephen C. Johnson, president and chief executive officer of Komag Inc. "Similar to our current thin-film media business, the capital requirements to establish adequate manufacturing capacity to serve this rapidly expanding market are quite substantial. With Ashai's commitment of nearly $60 million in equity capital to this project, we have fulfilled the financing requirements of the business for the foreseeable future. We can now focus our entire attention on the operational aspects of the business and our key objective -- the development of technically superior thin-film head products. Such products, in combination with our advanced thin-film media, are required to meet the ever-increasing data storage requirements of high-performance, high-capacity Winchester disk drives," Johnson continued.
 "This new joint venture between Asahi Glass and Komag represents a continuation of the long-term strategic business relationship between our two companies," commented Junjiro Tomozawa, senior executive vice president of Asahi Glass Co. Ltd. and member of Komag's board of directors. "Our first joint venture with Komag, Asahi Komag Co. Ltd. (AKCL), achieved profitability quickly and is now among the top three thin-film media manufacturers in Japan. We have been able to achieve amazing success through teamwork. At AKCL, Asahi has provided managerial and engineering direction, while Komag has provided technical and marketing support. Both of these contributions have been invaluable. Asahi now looks forward to working closely with the Dastek team and Komag to establish a technically advanced and responsive supplier to the thin-film head market. Our expertise in material science technology and automation techniques will assist in these efforts," added Tomozawa.
 Founded in 1907 in Japan, Asahi Glass is the world's leading glass manufacturer and a major international supplier of glass-related items, chemicals, ceramics and electronic products. The international network of the Asahi group includes 22 consolidated subsidiaries worldwide. In fiscal year 1990, Asahi's nonconsolidated net sales were approximately 7.5 billion U.S. dollars. Asahi employs approximately 9,500 people. Asahi is traded on all eight stock exchanges in Japan as well as the Luxembourg Stock Exchange.
 Founded in 1983, Komag and its two joint venture subsidiaries (Komag Material Technology Inc. and Dastek Inc.) maintain 610,000 square feet of manufacturing and administrative space in California and Malaysia. The company also operates a technical support facility in Singapore. Komag and its subsidiaries employ approximately 2,500 people. The company manufactures and sells thin-film disk products through its unconsolidated joint venture, Asahi Komag Co. Ltd., which is among the top three media producers in Japan. The company is traded on the NASDAQ over-the-counter market under the symbol KMAG.
 -0- 12/20/91
 /CONTACT: David H. Allen or William L. Potts, Jr., both of Komag Inc., 408-946-2300; or John Trifari of John Trifari Public Relations, 415-349-9812 for Komag/
 (KMAG) CO: Komag ST: California IN: CPR SU: JVN


RM -- SF003 -- 4443 12/20/91 14:50 EST
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Publication:PR Newswire
Date:Dec 20, 1991
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