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Announcement of Equity-Based Business Alliance

Information contained in the news releases are current as of the date of the press announcement, but may be subject to change without prior notice.

August 4, 2009

TDK Corporation ("the Company") today announced that its Board of Directors has approved a three-way business alliance relating to the organic EL display business involving the Company, wholly owned TDK subsidiary TDK Micro Device Corporation (Headquarters: Kitaibaraki City, Ibaraki Prefecture, President: Toshihiko Honma) and Futaba Corporation (Headquarters: Mobara, Chiba Prefecture, President: Hiroshi Sakurada). TDK Micro Device Corp. and Futaba Corp. will also enter into an equity-based alliance.

  1. Reason for the Equity-Based Business Alliance
    TDK and TDK Micro Device Corp. are developing and manufacturing organic electro-luminescent (EL) displays targeted mainly at the mobile phone and portable audio player market. Futaba Corp., meanwhile, is a leading manufacturer of vacuum fluorescent displays (VFD) and field emission displays (FED), and has traded with customers in the auto and consumer equipment industries for many years.

    The aim of the equity-based business alliance is to develop new organic EL products, leveraging the organic EL development and mass-production technologies possessed by TDK and TDK Micro Device Corp. and Futaba Corp.'s strength in the display industry, to open up new markets in the organic EL display business.
  2. Details of the Equity-Based Business Alliance
    (1) Details of the Business Alliance
    The Company, TDK Micro Device Corp. and Futaba Corp. will work together to develop organic EL displays and other materials for wide-ranging potential markets including automobiles and consumer electronics, leveraging the features of these displays that enable slim profiles and high resolution. The three companies will also work to cultivate markets.
    (2) Details of the Equity-Based Alliance
    TDK Micro Device Corp. will conduct a private placement of shares to raise capital to Futaba Corp. under the following terms and Futaba Corp. will subscribe to this issue.
    1) No. of shares to be issued: 4,150 shares of common stock
    2) Issue price: 210,000 yen per share
    3) Total purchase price: 871,500,000 yen
    4) Amount to be included in common stock: 435,750,000 yen
    5) Payment date (planned): October 1, 2009
    6) TDK Micro Device Corp. Shareholders (After Capital Increase) 4,150 shares of common stock
      TDK Corporation 12,450 shares (75%) (Notes 1, 2)
      Futaba Corporation 4,150 shares (25%)

    Notes:
    1. TDK Micro Device Corp. will remain a TDK consolidated subsidiary after this equity-based alliance.
    2. On the same date as this equity-based business alliance is concluded (October 1, 2009), the Company plans to inject capital into TDK Micro Device Corp. (total payment: 2,194,500,000 yen, no. of new shares to be issued: 10,450 shares)

  3. Overview of the Equity-Based Business Alliance Partners
    (1) Futaba Corporation (As of August 4, 2009)
    (1) Company Futaba Corporation
    (2) Headquarters 629 Oshiba, Mobara, Chiba Prefecture
    (3) Representative Hiroshi Sakurada, President
    (4) Main business Manufacture and sale of electronic components and machinery and tools
    (5) Paid-in capital 22,558 million yen
    (6) Established February 3, 1948
    (7) Main shareholders and shareholdings Japan Trustee Services Bank, Ltd. 8.7%
    Futaba Denshi Memorial Foundation 6.8%
    Reiji Hosoya 5.7%
    (As of March 31, 2009)
    (8) Relationships with TDK and TDK Micro Device Corp. Capital None
    Personnel None
    Trading There are no trading relationships that deserve mention between the companies concerned or their affiliated companies.
    Related party status None
    (9) Financial results for the three most recent fiscal years Year ended
    March 31, 2007
    (¥ million)
    Year ended
    March 31, 2008
    (¥ million)
    Year ended
    March 31, 2009
    (¥ million)
    Consolidated net assets 189,243 177,183 155,762
    Consolidated total assets 213,657 195,250 171,013
    Consolidated net sales 95,969 92,484 69,668
    Consolidated operating income (loss) 4,254 4,819 (3,430)
    Consolidated ordinary income (loss) 6,253 3,313 (2,242)
    Consolidated net income 3,452 (1,604) (11,755)
    Consolidated net income (loss) per share (yen) 75.99 (35.31) (258.76)
    Dividend per share (yen) 46.00 46.00 37.00
    Net assets per share (yen) 4,063.55 3,777.51 3,336.20

    (2) TDK Micro Device Corporation (As of August 4, 2009)
    (1) Company TDK Micro Device Corporation
    (2) Headquarters 644-55 Hitana, Nakago-cho, Kitaibaraki City, Ibaraki Prefecture
    (3) Representative Toshihiko Honma, President
    (4) Main business Manufacture and sales of visual display equipment, etc.
    (5) Paid-in capital 100 million yen (After capital increase: 1,633 million yen)
    (6) Established May 17, 1991
    (7) Fiscal year-end March 31
    (8) Issued shares 2,000 shares (After capital increase: 16,600 shares)
    (9) Shareholders and shareholdings TDK Corp. 100% (After capital increase: TDK Corp. 75%, Futaba Corp. 25%)
  4. Schedule
    • August 4, 2009
      TDK Board of Directors' resolution concerning equity-based business alliance
    • October 1, 2009 (planned)
      Private placement of shares by TDK Micro Device Corp. to Futaba Corp. to raise capital
  5. Outlook
    This equity-based business alliance will have an immaterial effect on TDK's consolidated operating results for the fiscal year ending March 31, 2010.

For further information, contact the Corporate Communications Dept.
Tel.: 81-3-6778-1055
E-mail: pr@jp.tdk.com

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