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News Release
Fuji Electric Systems, Fuji Electric Hi-Tech and TDK-Lambda Reach Final Agreement on UPS Business Consolidation

October 30,2009
Fuji Electric Holdings Co., Ltd.

On March 26, 2009, in the press release entitled “Fuji Electric Systems, Fuji Electric Hi-Tech and TDK-Lambda Reach Basic Agreement on UPS Business Consolidation,” Fuji Electric Holdings Co., Ltd. (Headquarters: Shinagawa-ku, Tokyo; President and Representative Director: Haruo Ito; hereinafter referred to as “FHC”) announced it was in consultations on a merger to take place on October 1, 2009 of the uninterruptible power supply (UPS) businesses of Fuji Electric Systems Co., Ltd. (Headquarters: Shinagawa-ku, Tokyo; President and Representative Director: Mitsunori Shirakura; hereinafter referred to as “FES”), a wholly-owned subsidiary of FHC, and TDK-Lambda Corporation (Headquarters: Shinagawa-ku, Tokyo; President and Representative Director: Takeo Suzuki; hereinafter referred to as “TLJ”), a wholly-owned subsidiary of TDK Corporation (Headquarters: Chuo-ku, Tokyo; President and CEO: Takehiro Kamigama; hereinafter referred to as “TDK”) with the internal power supply business (mainly custom power supplies) of Fuji Electric Hi-Tech Corporation (Headquarters: Minato-ku, Tokyo; President and Representative Director: Shinji Arai; hereinafter referred to as “FH”). Thereafter, on August 27, 2009, in the press release entitled “Change in the Schedule for UPS Business Consolidation,” FHC announced a change in the expected date of the merger to allow for further deliberation and discussion of the terms and conditions of the merger.
　The Board of Directors of FES resolved in a meeting held today to conclude a final agreement to the effect that the UPS business of TLJ will be merged into FES through an absorption-type corporate split (hereinafter referred to as “the split”) due to come into force on January 1, 2010. Pursuant to this resolution, the final agreement was concluded. In addition, the Board of Directors of FES and FH resolved in the meeting held today to conclude a final agreement to the effect that FES will merge with its wholly-owned subsidiary FH by absorption (hereinafter referred to as “the merger”) due to come into force on January 1, 2010. Pursuant to this resolution, a merger agreement was concluded, the details of which are shown below.
　The agreement on the split involving FES and TLJ is scheduled to be concluded on November 27, 2009.

1. Objectives

FES has strong capabilities in large-capacity UPS. By absorbing the UPS business of TLJ which has strengths in small- and middle-capacity UPS, FES will be able to offer a broader range of products. At the same time, FES will increase its cost competitiveness. Furthermore, with the addition of the internal power supply business currently operated by FH, the Fuji Electric Group aims to make FES a distinctive power supply manufacturer.

　Initially, the Fuji Electric Group envisaged that FH would be the parent organization. However, in order to use business resources more efficiently, increase the speed of development, reduce costs, and accelerate the pace of development for a new power drive system & solution business, concentrating the organization at FES was deemed to be more effective, and the initial plan was changed.

The key objectives of this merger include:
(a) Winning the top share in the Japanese UPS market
By consolidating the UPS businesses of FES and TLJ, the Fuji Electric Group will strive to expand the business and take market share from competitors to become the leading manufacturer in the Japanese middle- to large-capacity (10 kVA or larger) UPS market.

(b) Achieving synergies in core technologies
TLJ and FES have strengths in small- to middle-capacity UPS and large-capacity UPS, respectively. By combining the software and hardware technologies of each company, the Fuji Electric Group will promote more efficient product development.

(c) Enhancing cost competitiveness
The companies will seek to reduce costs by achieving synergies in the volume of goods handled and optimizing the mix of procurement resources of both companies. By capitalizing on the overseas production centers of TLJ, the Fuji Electric Group will increase its overseas production ratio to achieve further reductions in cost.

2-1. Overview of the Split

(1) Schedule of the split

Meeting of the Board of Directors to approve the final agreement with TLJ and agreement concerning the split October 28, 2009 (Wednesday)
Meeting of the Board of Directors to approve the final agreement with FES and agreement concerning the split October 30, 2009 (Friday)
Conclusion of the final agreement October 30, 2009 (Friday)
Conclusion of the agreement concerning the split Scheduled for November 27, 2009 (Friday)
Shareholders’ meeting for authorization of the agreement to split FES Scheduled for December 25, 2009 (Friday)
Date of entry into force of the split Scheduled for January 1, 2010 (Friday)

In the course of future procedures, the schedule above may be changed following consultation between FES and TLJ if absolutely required by circumstances.

(2) Method of split
The split will be an absorption-type split, with TLJ as the split company and FES as the successor company.

(3) Allocation in the split
FES will allocate 2.6 billion yen to TLJ as compensation for the split.

(4) Rationale for the amount of allocation in the split
To determine the amount of compensation for the split, GCA Savvian Corporation (hereinafter referred to as “GCAS”) was appointed as a financial adviser. GCAS calculated the business value of the UPS business to be inherited from TLJ, and based on this assessment, the compensation for the split was decided through repeated consultation and negotiation with TLJ.

(5) Handling of warrant rights and warrant bonds arising from the split
Not applicable.

(6) Increase or decrease in capital arising from the split
Not applicable.

(7) Rights and obligations inherited by the successor company
FES will inherit the assets, liabilities, contractual status and all associated rights and obligations related to the UPS business of TLJ (excluding those items specifically excluded in the contract concerning the split).

(8) Outlook regarding performance of obligations
FES judges that there will be no difficulty in performing its obligations from the date of entry into force of the split.

2-2. Overview of the companies that are party to the split

(As of October 30, 2009)

FES (Successor company) TLJ (Split company)
(1) Name Fuji Electric Systems Co., Ltd. TDK-Lambda Corporation
(2) Main business Development, manufacture, sales and servicing of various equipment used in social infrastructure related to industry, public services, energy, transportation etc. Development, manufacture, sales and servicing of power supply systems including switching power supplies and their peripheral devices, uninterruptible power systems, and power systems
(3) Date of establishment December 1, 1965 June 6, 1978
(4) Location of head office Shinagawa-ku, Tokyo Shinagawa-ku, Tokyo
(5) Title and name of the representative President and Representative Director: Mitsunori Shirakura President and Representative Director: Takeo Suzuki
(6) Capital 25,000 million yen 2,976 million yen
(7) Number of existing shares 12,980,006shares 364,415 shares
(8) Accounting period March 31 March 31
(9) Major shareholders FHC 100% TDK 100%

2-3. Overview of business segments inherited in the split

(1) Business segments inherited in the split
The UPS development, manufacturing and sales divisions of TLJ

(2) Volume of sales of the inherited divisions (Fiscal year ending 2009)
About 7.8 billion yen

3-1. Overview of the merger

(1) Schedule of merger

Meeting of the Board of Directors to approve the agreement concerning the merger of FES and FH October 30, 2009 (Friday)
Conclusion of the agreement concerning the merger October 30, 2009 (Friday)
Shareholders’ meeting for authorization of the agreement concerning the merger of FES and FH Scheduled for December 25, 2009 (Friday)
Date of entry into force of the merger Scheduled for January 1, 2010 (Friday)

(2) Method of merger
The merger will be a merger by absorption, with FES as the surviving company and FH as the dissolved company.

(3) Content of allocation in the merger
Since the merger is between FES and its wholly-owned subsidiary FH, no new shares will be issued, nor will any consideration be paid.

(4) Handling of warrant rights and warrant bonds of the dissolved company
Not applicable.

3-2. Overview of the companies that are party to the merger

(As of October 30, 2009)

FES (Surviving company) FH (Dissolved company)
(1) Name Fuji Electric Systems Co., Ltd. Fuji Electric Hi-Tech Corporation
(2) Main business Development, manufacture, sales and servicing of various equipment used in social infrastructure related to industry, public services, energy, transportation etc. Development, manufacture and sales of internal power sources (mainly custom power supplies)
(3) Date of establishment December 1, 1965 November 20, 1975
(4) Location of head office Shinagawa-ku, Tokyo Minato-ku, Tokyo
(5) Title and name of the representative President and Representative Director: Mitsunori Shirakura President and Representative Director: Shinji Arai
(6) Capital 25,000 million yen 80 million yen
(7) Number of existing shares 12,980,006shares 160,000 shares
(8) Accounting period March 31 March 31
(9) Major shareholders FHC 100% FES 100%

4. Status following the business merger

(1) Status of FES following the business merger
The name, business content, location of head office, title and name of the representative, capital, number of existing shares, and accounting period of FES will not change as a result of the split and merger.

(2) Expected impact of the business merger on business performance
Should it become apparent that the split or merger will have a significant impact on consolidated results, the matter will be disclosed promptly.