Panasonic to Reorganize Systems & Communications Company

  Panasonic to Reorganize Systems & Communications Company

Business Wire

OSAKA, Japan -- October 31, 2012

Panasonic Corporation (NYSE:PC)(TOKYO:6752)("Panasonic") today announced that
its Board of Directors decided to conduct mergers ("PSSJ Mergers") where
Panasonic System Solutions Japan Co., Ltd ("PSSJ"), a wholly-owned
consolidated subsidiary of Panasonic, will absorb Panasonic System Networks
Co., Ltd. ("PSN"), a wholly-owned consolidated subsidiary of Panasonic, and
Panasonic System Solutions Infrastructure Co., Ltd. ("PSSIS"), a wholly-owned
subsidiary of PSN. PSSJ Mergers are expected to take effect on March 1, 2013.

It was also decided that the mobile phone base station business of Panasonic
Mobile Communications Co., Ltd. ("PMC"), a wholly-owned consolidated
subsidiary of Panasonic, will be transferred, through a corporate split ("PMC
Station Business Transfer"), to the newly merged company after implementation
of PSSJ Mergers. At the same time, the mobile phone terminal business of PMC
will be transferred to a new mobile phone terminal business company which will
be newly incorporated through a corporate split of PMC ("PMC Terminal Business
Transfer"). Then, Panasonic will absorb the remaining PMC (having only a
function to hold and manage its assets) through a merger ("PMC Merger") with
an expected effective date of April 1, 2013. Details of the mergers and
corporate splits are summarized below.

1. Purpose of the Reorganization

Panasonic aims for expansion of the solution business through unification of
several functions for solution business, by integrating, through the merger,
PSN and PSSIS, which are the companies for development and manufacture of
systems, with PSSJ which is the sales and solution company, and switching to
the business which is closely connected to the market and customers with an
integrated operation of product development, manufacturing and sales. Further,
Panasonic will seek improvement of its development capability and enhancement
of its business capability, by integrating the PMC's mobile phone base station
business. With respect to the PMC's mobile phone terminal business, by
establishing a company specialized in the relevant business, Panasonic will
enhance its business capability and aim for maintenance and expansion of its
business in the mobile phone terminal market. At the same time, Panasonic will
effectively utilize assets of PMC by absorbing the entity left with the
function to manage PMC's assets.

2. PSSJ Mergers (Simplified Procedure)

(1) Purpose of PSSJ Mergers

By unifying the system solution businesses which are currently divided into
the company for development and manufacture, and the company for sales and
solution, we ensure such business closely connected to the market and
customers. At the same time, through unification of several functions for
system solution, we will aim for expansion of the solution business.

(2) Summary of PSSJ Mergers

  (a)  Schedule of PSSJ Mergers
          In the middle of December, 2012  Resolution of the Board of
          (planned):                       Directors on the merger
          In the middle of December, 2012  Signing of the merger agreement
          (planned):
          March 1, 2013 (planned):         Effective date of the merger
                                                                             
          (Note: Among PSSJ Mergers, the merger of PSN by PSSJ will be
          conducted through the simplified procedures provided under the
          Company Law of Japan, by which resolutions of the shareholders'
          meeting of PSSJ will not be required, and the resolution of the
          shareholders' meeting of PSN is scheduled to be made in the middle
          of February 2013.
                                                                             
          Furthermore, among PSSJ Mergers, the merger of PSSIS by PSSJ will
          be conducted through the simplified procedures provided under the
          Company Law of Japan, by which resolutions of the shareholders'
          meetings of PSSJ and PSSIS will not be required.)
                                                                             
    (b)   Method of PSSJ mergers
          PSSJ, as the continuing company, will absorb PSN and PSSIS, which
          will be dissolved upon the merger.
                                                                             
    (c)   Allotment in relation to the
          merger
          There shall be no allotment of shares or any other consideration
          upon PSSJ mergers.
                                                                             
    (d)   Treatment of stock acquisition rights and convertible bonds of the
          dissolving company
          There are no stock acquisition rights or convertible bonds issued
          by PSN and PSSIS.
                                                                             

(3) Basic information of PSSJ, PSN and PSSIS

(As of September 30, 2012)
                    Continuing Company  Dissolving Company  Dissolving Company
                        Panasonic System                          Panasonic System
                        Solutions Japan      Panasonic System     Solutions
(1)   Corporate name   Co., Ltd.            Networks Co., Ltd.   Infrastructure
                        (PSSJ, which will    (PSN)                Co., Ltd.
                        change corporate                          (PSSIS)
                        name)
                        21-1, Ginza          3-8, Shimomeguro     600 Saedo-cho,
(2)   Head office      8-chome,             2-                   Tsuzuki-ku,
                        Chuo-ku, Tokyo,      chome, Meguro-ku,    Yokohama City,
                        Japan                Tokyo, Japan         Kanagawa, Japan
       Name and title   President,           President,           President,
(3)   of               Tsugio Iwasa         Toshiyuki Takagi     Akinori Yanase
       representative
                        Sales of system
                        equipment and AV     Development,
                        equipment, plan,     manufacture and
                        development and      sales of             Development and
                        manufacture of       surveillance and     manufacture of
                        software, etc.,      monitoring           wireless system
       Principal        design and           systems,             network,
(4)   lines of         management of        verification and     infrastructure
       business         constructions,       settlement           green power
                        providing repair,    systems, PBX, IP     system, social
                        maintenance and      related equipment,   infrastructure
                        management           business phone,      systems, etc.
                        support, and sales   document related
                        of information       equipment, etc.
                        service, etc.
(5)   Stated capital   350 million yen      29,845 million yen   90 million yen
(6)   Date             April 1, 2008        December 24, 1955    September 1, 1988
       established
(7)   Number of        137,601 shares       175,140,851 shares   4,000 shares
       shares issued
(8)   Fiscal year      March 31             March 31             March 31
       end
       Major
       shareholders     Panasonic            Panasonic            Panasonic System
(9)   and              Corporation          Corporation          Networks Co., Ltd.
       shareholding     100%                 100%                 100%
       ratio
       Operating                                                  Panasonic System
       results          Panasonic System     Panasonic System     Solutions
       and financial    Solutions Japan      Networks Co., Ltd.   Infrastructure
(10)  conditions for   Co., Ltd.            (Non-consolidated,   Co., Ltd.
       the              (Non-consolidated,   Japan G.A.A.P.)      (Non-consolidated,
       year ended       Japan G.A.A.P.)                           Japan G.A.A.P.)
       March 31, 2012
     Net assets       37,011              74,188              5,071          
     Total assets     97,201              141,182             14,983         
       Shareholders'
     equity per       268,543.61          422.62              1,266,798.64   
       share
       (yen)
     Net sales        261,490             256,163             27,409         
       Operating
     profit           9,447               (6,108       )       331            
       (loss)
       Ordinary
     income           9,597               (4,027       )       217            
       (loss)
       Net income
       (loss)
     attributable     4,666               (15,085      )       49             
       to
       the company
       Net income
       (loss) per
       share
     attributable    33,914.28          (86.14       )      12,488.60      
       to
       the company
       per share
       (yen)
Note: In millions of yen, unless otherwise specified.
                                                                                 

3. PMC Terminal Business Transfer

(1) Purpose of PMC Terminal Business Transfer

Panasonic intends to build a business structure which is specialized in the
mobile phone terminal business in order to concentrate on such business and
quickly respond to changes, thereby aiming to enhance business capability and
to maintain and expand business in the relevant market.

(2) Summary of PMC Terminal Business Transfer

On April 1, 2013, upon changing its corporate name, PMC will transfer its
mobile phone terminal business to Panasonic Mobile Communications Co., Ltd.,
which will be newly incorporated by a corporate split.

(Note: With respect to PMC Terminal Business Transfer, the resolution of the
shareholders' meeting of PMC is scheduled to be made in the middle of February
2013.)

4. PMC Station Business Transfer

(1) Purpose of PMC Station Business Transfer

Panasonic intends to improve development and other business capabilities with
respect to the mobile phone base station business of PMC by transferring to
the newly merged company after implementation of PSSJ Mergers with the
wireless-related system business.

(2) Summary of PMC Station Business Transfer

The mobile phone base station business of PMC will be transferred to the newly
merged company after implementation of PSSJ Mergers through a corporate split
with an expected effective date of April 1, 2013.

5. PMC Merger (Simplified Procedure)

(1) Purpose of the PMC Merger

Panasonic intends to effectively utilize assets by absorbing the PMC entity,
which will only have the function to hold and manage those assets, after the
implementation of PMC Station Business Transfer and PMC Terminal Business
Transfer.

(2) Summary of the PMC Merger

  (a)  Schedule of the PMC Merger
          In the middle of December, 2012   Resolution of the Board of
          (planned):                        Directors on the merger
          In the middle of December, 2012   Signing of the merger agreement
          (planned):
          April 1, 2013 (planned):          Effective date of the merger
          
          (Note: The merger will be conducted through a simplified procedure
          provided under the Company Law of Japan, by which resolutions of the
          shareholders' meetings of Panasonic and PMC will not be required.)
                                            
    (b)   Method of the merger
          Panasonic, as the continuing company, will absorb PMC, which will be
          dissolved upon the merger.
                                            
    (c)   Allotment in relation to the
          merger
          There shall be no allotment of shares or any other consideration
          upon the merger.
          
    (d)   Treatment of stock acquisition rights and convertible bonds of the
          dissolving company
          There are no stock acquisition rights or convertible bonds issued by
          PMC.
          

(3) Basic information of Panasonic and PMC

(As of September 30, 2012)
                           Continuing Company           Dissolving Company
                                                           Panasonic Mobile
                                                           Communications Co.,
                                                           Ltd.
(1)   Corporate name        Panasonic Corporation         (PMC, which will
                                                           change its
                                                           corporate name
                                                           before this
                                                           merger)
                                                           600 Saedo-cho,
                             1006, Oaza Kadoma,            Tsuzuki-ku,
(2)   Head office           Kadoma City, Osaka, Japan     Yokohama City,
                                                           Kanagawa,
                                                           Japan
(3)   Name and title of     President,                    President,
       representative        Kazuhiro Tsuga                Toshinori Hoshi
                                                           Development,
                             Manufacture and sale of       manufacture and
(4)   Principal lines of    electronic and electric       sales of mobile
       business              equipment, etc.               phone terminal and
                                                           mobile phone base
                                                           station
(5)   Stated capital        258,740 million yen           22,856 million yen
(6)   Date established      December 15, 1935             January 17, 1958
(7)   Number of shares      2,453,053,497 shares          188,149,982 shares
       issued
(8)   Fiscal year end       March 31                      March 31
                             The Master
                             Trust Bank of
                             Japan,
                            Ltd. (trust       5.17  %
                             account)

                             
                             Japan Trustee                 Panasonic
                             Services Bank,                Corporation 100%
                             Ltd.               5.07  %
                             (trust account)
       Major shareholders
(9)    and shareholding      
       ratio                 Nippon Life
                             Insurance          3.12  %
                             Company
                             Sumitomo Mitsui
                             Banking
                             Corporation        2.72  %

                                                          
                             SSBT OD05
                            OMNIBUS           2.57  %
                             ACCOUNT-TREATY
                             CLIENTS
       Operating results                                   Panasonic Mobile
       and                   Panasonic Corporation         Communications Co.,
(10)  financial             (Consolidated, U.S.           Ltd.
       conditions            G.A.A.P.)                     (Non-consolidated,
       for the year ended                                  Japan
       March 31, 2012                                      G.A.A.P.)
     Net assets            1,977,566                    143,563      
     Total assets          6,601,055                    223,126      
       Shareholders'
     equity per share      834.79                       763.02       
       (yen)
     Net sales             7,846,216                    156,291      
     Operating profit      43,725                       (7,384       )
       (loss)
     Ordinary income       --                           (5,013       )
       (loss)
       Net income (loss)
     attributable to the   (772,172                 )    (4,435       )
       company
       Net income (loss)
       per share
     attributable to the  (333.96                  )   (23.57       )
       company per share
       (yen)

Notes:  1.  In millions of yen, unless otherwise specified.
         2.   As of September 30, 2012, Panasonic holds 141,368,990 shares of
              its common stock.
              Panasonic's "Shareholders' equity per share" is presented in
              accordance with the United States Generally Accepted Accounting
         3.   Principles (U.S. G.A.A.P.). As for PMC, the amount of "Net
              assets per share" is stated instead of "Shareholders' equity per
              share."
              With respect to Panasonic, the item "Ordinary income" is omitted
         4.   since it does not exist under U.S. G.A.A.P., which has been
              adopted by Panasonic on a consolidated basis.
              PMC's information is as of September 30, 2012; however, as a
         5.   result of PMC Station Business Transfer and PMC Terminal
              Business Transfer, PMC will only have a function to hold and
              manage its assets when the PMC Merger is conducted.
              

6. Conditions after the Merger


                                                           New Mobile Phone
                       Newly Merged Company           Terminal Business
                                                           Company
                           Panasonic System Networks       Panasonic Mobile
(1)  Corporate name       Co., Ltd. (The corporate name   Communications Co.,
                           of continuing company, PSSJ,    Ltd.
                           will be changed)
(2)  Name and title of    Not yet decided                 Not yet decided
      representative
                           Development, manufacture and
                           sales of surveillance and
                           monitoring camera,              Development,
      Principal lines of   verification and settlement     manufacture and
(3)  business             systems, PBX, IP related        sales of mobile
                           equipment, business phone,      phone.
                           document related equipment
                           and mobile phone base
                           stations, etc.
(4)  Stated capital       350 million yen                 5,700 million yen
(5)  Fiscal year end     March 31                       March 31
    

7. Effect on Financial Outlook

Effects of these reorganizations on our consolidated financial results are
reflected in our consolidated financial results for six months ended September
30, 2012 or are taken into account in the revision of our consolidated annual
forecast, which were announced today.

Disclaimer Regarding Forward-Looking Statements

This press release includes forward-looking statements (within the meaning of
Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S.
Securities Exchange Act of 1934) about Panasonic and its Group companies (the
Panasonic Group). To the extent that statements in this press release do not
relate to historical or current facts, they constitute forward-looking
statements. These forward-looking statements are based on the current
assumptions and beliefs of the Panasonic Group in light of the information
currently available to it, and involve known and unknown risks, uncertainties
and other factors. Such risks, uncertainties and other factors may cause the
Panasonic Group's actual results, performance, achievements or financial
position to be materially different from any future results, performance,
achievements or financial position expressed or implied by these
forward-looking statements. Panasonic undertakes no obligation to publicly
update any forward-looking statements after the date of this press release.
Investors are advised to consult any further disclosures by Panasonic in its
subsequent filings with the U.S. Securities and Exchange Commission pursuant
to the U.S. Securities Exchange Act of 1934 and its other filings.
The risks, uncertainties and other factors referred to above include, but are
not limited to, economic conditions, particularly consumer spending and
corporate capital expenditures in the United States, Europe, Japan, China and
other Asian countries; volatility in demand for electronic equipment and
components from business and industrial customers, as well as consumers in
many product and geographical markets; currency rate fluctuations, notably
between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies
and other currencies in which the Panasonic Group operates businesses, or in
which assets and liabilities of the Panasonic Group are denominated; the
possibility of the Panasonic Group incurring additional costs of raising
funds, because of changes in the fund raising environment; the ability of the
Panasonic Group to respond to rapid technological changes and changing
consumer preferences with timely and cost-effective introductions of new
products in markets that are highly competitive in terms of both price and
technology; the possibility of not achieving expected results on the alliances
or mergers and acquisitions including the business reorganization after the
acquisition of all shares of Panasonic Electric Works Co., Ltd. and SANYO
Electric Co., Ltd.; the ability of the Panasonic Group to achieve its business
objectives through joint ventures and other collaborative agreements with
other companies; the ability of the Panasonic Group to maintain competitive
strength in many product and geographical areas; the possibility of incurring
expenses resulting from any defects in products or services of the Panasonic
Group; the possibility that the Panasonic Group may face intellectual property
infringement claims by third parties; current and potential, direct and
indirect restrictions imposed by other countries over trade, manufacturing,
labor and operations; fluctuations in market prices of securities and other
assets in which the Panasonic Group has holdings or changes in valuation of
long-lived assets, including property, plant and equipment and goodwill,
deferred tax assets and uncertain tax positions; future changes or revisions
to accounting policies or accounting rules; as well as natural disasters
including earthquakes, prevalence of infectious diseases throughout the world,
disruption of supply chain and other events that may negatively impact
business activities of the Panasonic Group. The factors listed above are not
all-inclusive and further information is contained in Panasonic's latest
annual reports, Form 20-F, and any other reports and documents which are on
file with the U.S. Securities and Exchange Commission.

In order to be consistent with generally accepted financial reporting
practices in Japan, operating profit (loss) is presented in accordance with
generally accepted accounting principles in Japan. The company believes that
this is useful to investors in comparing the company's financial results with
those of other Japanese companies. Under United States generally accepted
accounting principles, expenses associated with the implementation of early
retirement programs at certain domestic and overseas companies, and impairment
losses on long-lived assets are usually included as part of operating profit
(loss) in the statement of income.

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Contact:

Panasonic Corporation
Media Contacts:
Atsushi Hinoki, +81-3-3574-5664 (Japan)
Global Public Relations Office
or
Panasonic News Bureau (Japan)
Tel: +81-3-3542-6205
or
Jim Reilly, +1-201-392-6067 (U.S.)
or
Anne Guennewig, +49-611-235-457 (Europe)
or
Investor Relations Contacts:
Shozo Mizuno, +81-6-6908-1121 (Japan)
Corporate Finance & IR Group
or
Panasonic Finance (America), Inc.
Yuko Iwatsu, +1-212-698-1360 (U.S.)
or
Panasonic Finance (Europe) plc
Hiroko Carvell,+44-20-3008-6887 (Europe)
 
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