From a press release issued by Reese & Associates:

Yuasa and Japan Storage Battery Announce Plans To Merge

Reading, PA — Yuasa Corporation (YUASA) and Japan Storage Battery Co., Ltd. (JSB) have agreed in principle to merge under a jointly incorporated holding company. The merger will create one of the world’s largest storage battery companies with annual sales of 264 billion yen and 12,000 employees worldwide. Subject to regulatory and shareholder’s approval, the merger will be effective on April 1, 2004, by incorporation of the new holding company.
The name of the new holding company will be GS Yuasa Corporation.

According to the leadership of the two companies, the new enterprise will focus on innovative product development, satisfying global customers and operating efficiencies initiatives. There are three reasons why the company’s executives are confident they will achieve their goals. First, the new company’s combined entities have 28 manufacturing operations in 14 countries, which can deliver high quality products on time to meet the requirements of global customers. Second, the new company has greater R&D resources to develop world-class, innovative products for the next generation of storage battery. Finally, the new company can consolidate its logistics, production, sales/marketing and procurement to significantly improve its cost structure. With its vision of innovation and leadership, the new company will have a strong platform to sustain medium- and long-term growth and become one of the global leaders among electrical storage solution providers.

Structure
Under the terms of the legally non-binding agreement in principle, approved by both companies’ Boards of Directors, the two companies will jointly establish a holding company and become wholly-owned subsidiaries of the holding company. The shareholders of each company will exchange their shares for the holding company’s shares. As a result, the shareholders of YUASA and JSB will become the holding company’s shareholders.

Exchange Ratio
The exchange ratio for the share swap will be 1:1. Under the 1:1 ratio, one share of YUASA and one share of JSB will be exchanged for same number of shares of the newly incorporated holding company. While the exchange ratio is agreed in principle, the actual allotment ratio (i.e. how many shares of the holding company will be allotted in exchange for shares of YUASA AND JSB) will be determined later in accordance with the new holding company’s capital policy. Currently, the holding company plans to pay no cash consideration to either company’s shareholders at the time of the share exchange.

Financial Advisors
Global Corporate Advisory K. K., as financial advisor of YUASA, and Mitsubishi Securities Co., Ltd., as financial advisor of JSB, performed an analysis of the share exchange ratio. The financial advisors performed their analysis from the financial viewpoint of their respective client’s shareholders and advised their clients independently. Taking the analyses and advice into consideration, YUASA and JSB had extensive discussions and came to an agreement in principle on the above exchange ratio. Should any change in assumptions of the analyses occur, the share exchange ratio may change based on further discussions between the two companies.

Listings on the TSE and OSE
The holding company’s shares are expected to be listed on the Tokyo Stock Exchange and the Osaka Stock Exchange. The listing is scheduled to be April 1, 2004, subject to the approval process of each stock exchange. When the new holding company listing is approved, the shares of YUASA and JSB will be de-listed.

Headquarters
Kyoto will be the legally registered headquarters. The merged entity will be headquartered in both Kyoto and Tokyo. The holding company corporate headquarters will play an active role in setting group strategy, implementing strategy, and monitoring group companies’ performance to maximize shareholder value.

Integration Plan
To achieve operational efficiencies and synergies, the two companies’ operations are expected to be integrated under the holding company. This integration may involve the mergers of operations by function. The Integration Committee, which will be launched immediately after this announcement, will discuss and determine the integration details.

Leadership
Naruo Otsubo, president of YUASA, will become president and Co-CEO of the holding company and Shinichiro Murakami, president of JSB, will become chairman and Co-CEO of the holding company. They are committed to take leadership and direct the new group to a dominant position in the global storage battery business.

About JSB and YUASA
JSB and YUASA, both incorporated in Japan have been leading companies in the manufacture and distribution of storage batteries for 85 years.