May 22, 2009 Fuji Electric Engineering & Construction Co., Ltd. Furukawa Engineering & Construction Inc. Fuji Denki Sosetsu Co., Ltd.

Fuji Electric Engineering & Construction, Fuji Denki Sosetsu and Furukawa
Engineering & Construction Merge to Forma a New Company

Fuji Electric Engineering & Construction Co., Ltd. (President: Fumiaki Koike; Headquarters: Kawasaki-shi, Kanagawa Prefecture) and Fuji Denki Sosetsu Co., Ltd. (President: Tomoyasu Kida, Headquarters: Chuo-ku, Tokyo), subsidiaries of Fuji Electric Holdings Co., Ltd. (President: Haruo Ito; Headquarters: Shinagawa-ku, Tokyo), and Furukawa Engineering & Construction Inc. (President: Shunjiro Ogura; Headquarters: Ohta-ku, Tokyo), a subsidiary of The Furukawa Electric Co., Ltd. (President: Masao Yoshida; Headquarters: Chiyoda-ku, Tokyo) announced today that the three companies would merge on October 1, 2009 to form a new company called Fuji Furukawa Engineering & Construction Co.Ltd , which provides a comprehensive facility construction service through new business models.

The three companies will pursue synergy by integrating their respective engineering capabilities, facility construction technologies and execution know-how. The new company will offer a one-stop shop of engineering services that meets a variety of facility construction needs in a wide construction area including electricity, instrumentation, air-conditioning, plumbing and information communication. While quickly responding to customers' requirements, the company will strive to achieve a comprehensive, environmentally-friendly and high-quality execution. Its combined broad sales network will also be utilized to provide fine-tuned customer services and a comprehensive service that covers from new facility construction to after-sales maintenance. By combining the three companies' wealth of experience, the new company will better manage execution and safety of construction work.

By capitalizing on the economy of scale that is achieved through merger, new business opportunities are expected, such as projects for large facility construction. So far each of the three companies has operated in the field where each of them has strength, but the new company expects to expand its business to the new fields that cannot be reached by one company's capability. The company will also handle all facility construction work across the Furukawa Group, including those for Fujitsu and Yokohama Rubber.

The new company will fundamentally rebuild the “green” business by combining and reviewing green efforts that each company has worked on. Fuji Electric and Furukawa Electric focus on energy, environment and information communication fields and therefore, through a closer collaboration with engineering teams of these fields, the new company will push forward the comprehensive facility construction service built on green efforts and contribute to both customers and local communities.

(a)	Reinforce businesses targeting green IT and alternative energy markets
	Fuji Electric Engineering & Construction, Fuji Denki Sosetsu and Furukawa Engineering & Construction have strength respectively in electrical equipment work such as installation of uninterruptible power supply systems, air-conditioning equipment work, and information communication equipment work. By combining these strengths of respective companies, the new company will target green internet data center (green iDC) and other green IT markets, where significant growth is expected, and offer a comprehensive solution covering from solution proposals and construction to after-sales services in cooperation with its parent companies.
	For example, the company will focus on the following markets:
	Green iDC solutions Power generation systems using green energy such as solar cells, photovoltaic power conditioning systems, grid connection and smart grids.
(b)	Roll out new business models such as energy diagnosis service
	The new company will roll out energy diagnosis services such as visualization of energy consumption, CO2 emissions and running costs; and calculation and assessment of benefits of introducing energy-saving facilities. Based on the result of diagnosis, the company will also offer an integrated service covering planning, proposing, construction planning and execution, assessment and after-sales service of optimal energy systems.

Fuji Electric Engineering & Construction has a wealth of experience in electrical instrumentation and machinery installation businesses overseas, including 40 years in Thailand and 10 years in Vietnam and the Philippine. It also set up a new office in Taipei last year and Cambodia this year. Based on this business base overseas, the new company will deploy an integrated facility construction service by incorporating air-conditioning and information communication equipment capabilities through merger. This will allow the new company to expand its business reach, beyond conventional Official Development Assistant (ODA) projects or projects for the Japanese companies that aim for overseas foray, to projects for local companies including subsidiaries of the US and European companies. The company will also help build social and industrial infrastructure overseas in the energy and environment aspects by strengthening collaboration with its parent companies.

As a company that offers a comprehensive facility construction, the new company will strengthen after-sales service business not only in the air-conditioning market, where Fuji Denki Sosetsu has operated, but also in the electrical facility market, including power distribution, by making the most of the engineering capability and operation network that will be enhanced through merger. Targeting manufacturing companies, the new company will also upgrade the maintenance business overseas to further contribute to customers.

To enhance financial strength through merger, various programs including streamlining of operating sites and personnel reassignment will be carried out to reduce fixed costs. While maintaining and improving quality of services, the company will strive to increase construction project orders both in and outside Japan, and enhance the service business. In line with the business size that will be expanded through merger, up-front investments will be increased to exploit new businesses and develop human resources. This will allow the company to boost its fundamental technological capability and ensure integrity of service.

This merger will expand procurement volume of material and equipment, sales channel and business partners, and will allow the company to better manage execution and safety in order to meet customers' requirements. Also, responding to demand from society, the company will not only enhance corporate governance, including internal control, and ensure compliance but also appropriately apply the percent of completion method to gain public trust.

Total sales of the three companies amount to approximately ¥73 billion. The new company will target sales of approximately ¥100 billion after five years and being within the top 20 in the facility construction market. It will also aim to list its stock on the first section of the Tokyo Stock Exchange (TSE) within five years, aiming to evolve into a company that is further trusted by customers.

(1)	Date of merger
	Scheduled date of merger (effective date): October 1, 2009
(2)	Method of merger
	The merger will be an absorption–type merger, with Fuji Electric Engineering & Construction, as the surviving company, and Furukawa Engineering & Construction and Fuji Denki Sosetsu, to be dissolved.
(3)	Expected delisting of Furukawa Engineering & Construction
	If this merger is approved at the shareholders' meetings of the three companies, Furukawa Engineering & Construction's common stock will be delisted from TSE as of September 25, 2009 in accordance with the delisting standards of TSE (the last trade date to be the day before the delisting date)

General Affairs
Planning Dept.
Fuji Electric Engineering & Construction Co., Ltd.
Tel. +81-44-548-4372