Komatsu Signs a Definitive Agreement to Sell its Outdoor Power Equipment Business to Husqvarna

Komatsu Ltd. (President: Masahiro Sakane, hereinafter referred to as "Komatsu") and KOMATSU ZENOAH Co. (President: Susumu Isoda, hereinafter referred to as "KOMATSU ZENOAH"), a subsidiary of Komatsu, signed a letter of intent on September 25 2006 to sell KOMATSU ZENOAH's outdoor power equipment business (hereinafter referred to as "OPE business") to Sweden's Husqvarna AB, (President: Mr. Bengt Andersson, hereinafter referred to as "HUSQVARNA"), and since have held negotiations aiming to execute a definitive agreement.
As a result, KOMATSU ZENOAH formally signed the definitive agreement with Husqvarna Japan Ltd., a Japanese subsidiary of HUSQVARNA. The enterprise value of the transaction is JPY 18.25 Billion. After splitting off OPE business from KOMATSU ZENOAH as a new company named ZENOAH Co.,Ltd. (hereinafter referred to as "ZENOAH"), the transaction is scheduled to close on April 2, subject to the satisfaction of certain conditions in the definitive agreement. Mr. Bengt Andersson from HUSQVARNA will become the chairman of ZENOAH, and Mr. Kazuhiro Aoyagi from KOMATSU ZENOAH will become the president. Current management as well as employees of OPE business will remain in ZENOAH.
The profit from the sale is expected to be registered in the fiscal year ending March 2008.


[Outline of New OPE Business Company]
Company Name : Zenoah Co., Ltd. (Note 1)
Establishment : December 2006
Location : 1-9, Minamidai, Kawagoe-city, Saitama, Japan
President : Kazuhiro Aoyagi
Line of Business : Manufacture and sale of outdoor power equipments
Capitalization : JPY 1 million (Note 2)
Sales : JPY 19,444 million (Consolidated, for the fiscal year ended March 31, 2006)
No. of Employees : 692 (Consolidated, as of March 31, 2006)

Note 1. Zenoah Co., Ltd. will be sold to Husqvarna Japan Ltd following a merging split of the OPE business from KOMATSU ZENOAH to Zenoah Co., Ltd.
Note 2. Capital stock of Zenoah Co., will be increased to JPY 500 million at merging split.


[Outline of Komatsu Zenoah Co.]
Establishment : February 1910
Location : 1-9, Minamidai, Kawagoe-city, Saitama, Japan
President : Susumu Isoda
Line of Business : Manufacture and sale of outdoor power equipments, construction equipments, and hydraulic equipments
Capitalization : JPY 5,099 million
Sales : JPY 97,950 million (Consolidated, for the fiscal year ended March 31, 2006) (OPE business; JPY 19,444 million)
No. of Employees : 1,877 (Consolidated, as of March 31, 2006) (OPE business; 692)


[Outline of Husqvarna AB]
Establishment : April 1897
Location : Stockholm, Sweden
President : Bengt Andersson
Line of Business : Manufacture and sale of outdoor power equipments
Capitalization : SEK 5,891 million
Sales (CY2005) : SEK 28,768 million
No. of Employees : 11,631 (Consolidated, for the average of 2005)

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