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TDK expands its advanced materials technology by acquiring TODA Kogyo shares and enhancing joint development activities

  • TDK aims to further strengthen the foundation of its electronics components business by bolstering its materials technology.
  • TDK continues to accurately respond to customer needs for electronic components such as high reliability, high quality, high characteristics in three growth markets, automotive, industrial & energy and ICT (Information and Communication Technology).
  • TDK to strengthen its manufacturing excellence

July 30, 2018

TDK Corporation (TSE 6762, President and CEO: Shigenao Ishiguro, hereinafter “TDK”) agreed at meeting of its Board of Directors to sign a capital and business alliance agreement with Toda Kogyo Corp. (President and Representative Director: Shigeru Takaragi, hereinafter “TODA Kogyo”), a leading iron oxide and electronic materials manufacturer.
Moreover, TDK agreed to sign a share transfer agreement with ITOCHU Corporation (Chairman & Chief Executive Officer: Masahiro Okafuji, hereinafter “ITOCHU”) and acquire all outstanding shares of Toda Kogyo held by ITOCHU. TDK will hold 23.93% of the outstanding shares of Toda Kogyo (voting stock 25.53%) after the acquisition of the shares, and Toda Kogyo will become an equity method affiliate of TDK.

1. Purpose of Share Acquisition

Based on its unique material technology, the electronic components business - and especially its magnetic material technology - has been one of the main businesses of TDK since its foundation in 1935.
In April 2018 “Value Creation 2020,” the new medium-term management plan, has been launched. TDK aims to achieve a breakthrough in market-driven solutions with a focus on the electronic components business.
The company is aiming to further deepen material and process technology, and to strengthen the market competitiveness of its products through production reform and manufacturing excellence and ultimately achieving high-quality products with zero defects.

Previously, TDK and TODA Kogyo had a track record of joint development in the materials field. The development of new materials based on the magnetic materials technologies and materials synthesis at which TDK excels, is believed to enable materials development that helps to further bolster the competitiveness of TDK’s electric components through TDK’s active future involvement.
Specifically, it is believed to be possible that needs such as highly reliability, high quality, and strong features required in the three key markets (automotive, industrial & energy, ICT) will be effectively met by TDK’s involvement in upstream materials development, working with TODA Kogyo and developing the optimum materials for electronic components.
Looking ahead, TDK also judges that engaging in materials development in areas other than passive components will create much more synergy and will boost the competitiveness of the materials technology of both companies. For these reasons, TDK has decided to strengthen its materials technology through the acquisition of TODA Kogyo shares.

This will help further improve the quality of the electronic components of TDK, starting from a material base stage. TDK will take another step towards achieving its target of zero defects. As such, TDK believes that it will be able to provide safe and secure products to customers in a timely manner.

2. Summary of share acquisition (Figures below are ratio of ownership voting rights)

1) No. of shares to be acquired and ratio: 1,260,000 shares, 22.04%
2) Percentage of owned stocks before and after acquisition: (Before acquisition) 3.49%
(After acquisition) 25.53%*
3) Schedule of timing for share acquisition: January 10, 2019 (scheduled)**

* The percentage of outstanding shares is 23.93%.
** The capital and business alliance agreement is scheduled to start on January 10, 2019.

3. Future outlook

The impact of this matter on consolidated earnings forecast of the TDK Group is expected to be insignificant for the period ending in March 2019.

About TDK Corporation

TDK Corporation is a leading electronics company based in Tokyo, Japan. It was established in 1935 to commercialize ferrite, a key material in electronic and magnetic products. TDK's comprehensive portfolio features passive components such as ceramic, aluminum electrolytic and film capacitors, as well as magnetics, high-frequency, and piezo and protection devices. The product spectrum also includes sensors and sensor systems such as temperature and pressure, magnetic, and MEMS sensors. In addition, TDK provides power supplies and energy devices, magnetic heads and more. These products are marketed under the product brands TDK, EPCOS, InvenSense, Micronas, Tronics and TDK-Lambda. TDK focuses on demanding markets in the areas of information and communication technology and automotive, industrial and consumer electronics. The company has a network of design and manufacturing locations and sales offices in Asia, Europe, and in North and South America. In fiscal 2018, TDK posted total sales of USD 12 billion and employed about 103,000 people worldwide.

Contacts for regional media

Region Contact Phone Mail
Global Mr. Yoichi OSUGA TDK Corporation
Tokyo, Japan
+813 6778-1055 pr@jp.tdk.com

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