Mitsubishi Rayon Co., Ltd. (MRC) has reached a basic agreement with Arm Electronics Co., Ltd. under which Arm Electronics will purchase a 90% equity stake in MRC’s consolidated subsidiary Ryoko Electronic Industries, Ltd., a manufacturer of printed wiring boards. At the same time, Arm will purchase all sales rights to, and goodwill associated with, the products of Ryoko Electronic Industries, which are the property of Mitsubishi Rayon.
As stated in the Company’s April announcement of its latest medium-term management plan, a major priority will be a strong focus on investing even more management resources in the Company’s core acrylic business, consisting of the MMA (methyl methacrylate) and AN (acrylonitrile) business complexes. In line with this strategy, we have decided to sell off our printed wiring boards business even though it is part of our larger information materials business – which has good growth prospects -- in view of the lack of any significant synergy between printed wiring boards and other MMA business operations.
Henceforward, Mitsubishi Rayon’s information materials business will focus its energies on developing original materials with special optical functions born of a fusion between the Company’s acrylic resin expertise and its know-how in the field of optical engineering. In this, we will take full advantage of our molecular design and optical engineering technology. We expect to achieve dramatic expansion in the scale of our operations in the market for display materials for information technology products.
By contrast, Mitsubishi Rayon’s partner in this agreement, Arm Electronics Co., Ltd., positions printed wiring boards as the core of its business operations. Arm’s acquisition of Ryoko Electronic Industries and associated sales rights and goodwill is aimed at further strengthening its core business.
Founded as a specialist electronics arm of the Mitsubishi Rayon Group in 1963, Ryoko Electronic Industries was one of the first companies in Japan to engage in the design and production of printed wiring boards. Today, its products – which are sold through the parent company -- are used in semiconductor testers, communications equipment, and a variety of other industrial applications. In the field of high-density, super-multilayer printed wiring boards, Ryoko ElectronicIndustries handles all processes from initial concept development through pattern design to mass production, and has accumulated an impressive record of deliveries to many prestigious customers.
The recently concluded agreement between MRC and Arm was prompted by the considerations that Arm and Ryoko do not have the same customers (which promises the combined enterprise an expanded book of buyers), and that the addition of Ryoko’s high-level expertise in design, production and quality control to Arm’s superiority in the areas of ultra-short delivery times for pilot models and small-lot production of a wide variety of models would be likely to create a synergy that would translate into higher profits.
Under the agreement, MRC will first transfer its sales rights and goodwill to the production company, Ryoko Electronic Industries, upon which Arm Electronics Co., Ltd. will purchase a 90% equity stake in the latter. |
