February 24, 2005

 

Name of Company:

KAGA ELECTRONICS CO., LTD.

Stock Code:

8154

Stock Exchange Listing:

Tokyo Stock Exchange, First Section

Headquarters:

2-2-9, Hongo, Bunkyo-ku, Tokyo

Representative

 

Title:

Founder & CEO

Name:

Isao Tsukamoto

Contact Person

 

Title

Managing Director, Finance & Administration Headquarters

Name:

Waichiro Shimoyama

Tel:

+81-(0)3-4455-3111

 

Notice of Merger of Subsidiaries

 

KAGA ELECTRONICS CO., LTD. (Founder & CEO: Isao Tsukamoto, Headquarters: Bunkyo-ku, Tokyo, Capital :  9,660 million yen as of January 31, 2005)hereby serves notice that, at a meeting held on February 24, 2005, the Board of Directors approved a resolution to conduct a merger of KAGA TECH CO., LTD. And KANTO AUTOMATION Co., Ltd., both consolidated subsidiaries of KAGA ELECTRONICS. Details are as follows:

 

1. Purpose of the Merger

KAGA ELECTRONICS made the decision regarding this merger in order to strengthen both market competitiveness and profitability of the KAGA Group, and to execute, thereby, efficient management of the Group.

The merger ratio between KAGA TECH CO., LTD. and KANTO AUTOMATION Co., Ltd. will be equal. KAGA TECH CO., LTD. will be the surviving company. The date of the merger is planned for April 1, 2005.

In accordance with this merger, the Amusement Machines Development Business of KAGA TECH CO., LTD. is expected to transfer to the Specific Industry Sales Headquarters of KAGA ELECTRONICS, the Entrust Business for Game Software Development to the Digital Media Lab., Inc.(KAGA ELECTRONICS 100.0%), and the Game Software Development Business to the DIGITAL GAIN CO., LTD., a wholly owned subsidiary of KAGA ELECTRONICS, respectively.

 

2. Post-Merger Company Information

KAGA TECH CO., LTD.

Name of Company:

KAGA TECH CO., LTD.

Headquarters:

2-2-9, Hongo, Bunkyo-ku, Tokyo

Description of Business:

Manufacture and sale of electronic components and electronic devices.

Date of Establishment:

June 22, 1988

Capital:

80 million yen (KAGA ELECTRONICS 100%)

Number of Employees:

21

Representative:

Shigetoshi Nakazono

 

(On special assignment from KAGA ELECTRONICS)

Net Sales:

1,800 million yen (March 2006 forecast)


3. Pre-Merger Company Information

(1) KAGA TECH CO., LTD.

Name of Company:

KAGA TECH CO., LTD.

Headquarters:

2-2-9, Hongo, Bunkyo-ku, Tokyo

Description of Business:

Manufacture and sale of electronic components and electronic devices.

Date of Establishment:

June 22, 1988

Capital:

50 million yen (KAGA ELECTRONICS 100%)

Number of Employees:

25

Representative:

Shinji Takahashi

 

(Executive Vice President of KAGA ELECTRONICS)

Net Sales:

2,700 million yen (March 2005 forecast)

 

(2) KANTO AUTOMATION Co., Ltd.

Name of Company:

KANTO AUTOMATION Co., Ltd.

Headquarters:

2-2-9, Hongo, Bunkyo-ku, Tokyo

Description of Business:

Sale of electronic components and electronic devices.

Date of Establishment:

April 5, 1972

Capital:

30 million yen (KAGA ELECTRONICS 94.9%)

Number of Employees:

5

Representative:

Kawase Mitsuo

Net Sales:

300 million yen (March 2005 forecast)

 

4. Effect on Operating Results

The merger will have no effect on the operating results of KAGA ELECTRONICS.