30-Jul-10
Company Name: Fuji Electric Holdings Co., Ltd.
Representative: Michihiro Kitazawa, President and Representative Director
Code Number: 6504, listed on the first sections of TSE, OSE and NSE, and on FSE
Contact: Takashi Kusaka, General Manager, Corporate Planning Office
Telephone: +81-3-5435-7213

Fuji Electric and GE Moving Forward on New Joint Venture for Japan’s Meter Business

Fuji Electric Holdings Co., Ltd. (hereinafter referred to as “Fuji” or “the Company”) and the General Electric Company (hereinafter referred to as “GE”) today announced their decision to pursue substantive discussions on the establishment of a joint-venture company to design, manufacture and market electric meters for use by Japan’s electric utilities and other customers. This decision follows the execution of a non-binding memorandum, details of which were previously outlined in the press release “Fuji Electric Holdings and GE signed MOU to Form a JV for Japan’s Meter Business” issued on February 25, 2010.

In accordance with the aforementioned non-binding memorandum, and following a meeting of the Company’s Board of Directors held today, Fuji, its consolidated subsidiary Fuji Electric Systems Co., Ltd. (hereinafter referred to as “FES”), and FES’s consolidated subsidiary Azumi Fuji Co., Ltd. (hereinafter referred to as “Azumi Fuji”) agreed to the establishment of a new company (hereinafter referred to as “the New Company”) by way of a joint establishment-type company split (hereinafter referred to as “the Company Split”) involving each of the meter businesses of FES and Azumi Fuji. As a part of the Company Split, the New Company will succeed the rights and obligations of the meter businesses of FES and Azumi Fuji, effective October 1, 2010. At the same time, it was resolved that GE and GE Energy Japan, Ltd. (hereinafter referred to as “GEEJ”) would conclude an agreement between shareholders. This agreement between shareholders will outline those terms and conditions that relate to the future management and operation of the joint-venture company as well as details of the agreement to establish a joint-venture company including the transfer of 49.99% of the common stock of the New Company held by FES (hereinafter referred to as “the Stock Transfer”) to GEEJ following the merger of FES and Azumi Fuji, details of which are outlined later in this release.

Furthermore, following meetings of the boards of directors of FES and Azumi Fuji, and with the condition precedent that the Company Split will take effect, the resolution was passed for FES to merge with Azumi Fuji after the Company Split (hereinafter referred to as “the Merger”) effective October 1, 2010. On the basis of this resolution, a merger agreement was concluded between the two companies.

Taking all of the aforementioned into consideration, plans are now in place to inaugurate the joint-venture company GE Fuji Electric Meter Co., Ltd. Issued and outstanding shares of this company will be held in the ratio of FES 50.01% and GEEJ 49.99%. All other details are provided briefly as follows.

1. Reasons for Establishing the Joint-Venture Company

With the push to realize a low-carbon society, the need to enhance energy efficiency will become more and more important. Under these circumstances, smart meters will play an increasingly vital role within modern smart grid strategies that strive to better understand, manage and utilize electricity. Smart meters enable an accurate visualization of energy consumption, giving customers and utilities the necessary information to better monitor, understand, manage and control energy usage. At the same time, meters boast interactive communication capabilities, which help to promote greater efficiency and confidence in grid infrastructure. As a company that aims to help build a low-carbon society, the joint venture will leverage the quality and performance inherent in smart meters to contribute to their increased acceptance and use within Japan.

The Fuji Electric Group has actively engaged in meter business activities for over 70 years and boasts comprehensive capabilities spanning manufacturing, sales and service. The Group is also adopting an aggressive stance toward developing its smart meter business.

GE, in turn, maintains significant global expertise and capabilities in smart grid technologies and has been continuously working to develop, design, manufacture and sell meters worldwide in order to enhance smart grid efficiency.

The Fuji Electric Group and GE, both leading entities in the energy and electricity industries, bring to the table such wide-ranging attributes as technological expertise and specialist knowledge. In addition to a wealth of experience, GE boasts substantial skills in global business development. For its part, the Fuji Electric Group will make available its well-established meter manufacturing and sales network in Japan. The joint-venture company will supply high-quality, flexible and cost competitive meters throughout Japan.

To continue reading, please go the following page:
http://www.fujielectric.com/news/pdf/10073001.pdf