Komatsu Announces Restructuring of the Press Business: Succession by Wholly Owned Subsidiary through Simplified Absorption-Type Corporate Split

Komatsu Ltd. (hereinafter "Komatsu") hereby announces that Komatsu decided, at the Board of Directors meeting held today, to have Komatsu Industries Corporation (hereinafter "Komatsu Industries"), a wholly owned subsidiary of Komatsu, succeed to the product development and sales & service operations of the large press business of the Industrial Machinery Division by way of an absorption-type corporate split (hereinafter "Absorption-Type Corporate Split") effective April 1, 2010.
As this corporate split is a simplified absorption-type corporate split, which means the wholly owned subsidiary of Komatsu becomes the successor company, certain matters and descriptions are omitted from the disclosure below.
Komatsu believes that effects of the Absorption-Type Corporate Split on its consolidated business results will be minimal.

Affected by the worldwide economic downturn since autumn of last year, Komatsu's Industrial Machinery Division's main clients, such as the automobile manufacturing industry, have drastically reduced capital investment. Against this backdrop, Komatsu needs to manage the industrial machinery business more efficiently in order to promote its sustainable growth as a core business of Komatsu. Specifically, Komatsu is going to integrate its large press operation and Komatsu Industries' small and medium-sized press operation in order to: (1) reinforce its development capability by reorganizing its development operations and (2) enhance customer satisfaction by reorganizing its marketing operations in tune with customer characteristics.
At the same time, Komatsu Industries is also going to speed up the management decision-making process, while working to develop and expand business in China and other emerging economies by integrating marketing and development activities for large, medium-sized and small presses.

1)Schedule
December 15, 2009:Resolution of Company Split by the Board of Directors
December 15, 2009:Execution of the Company Split Agreement by the Board of Directors
April 1, 2010: Scheduled date of Company Split (effective date)(planned)
Note: Because this is a simplified absorption-type corporate split as provided for in Article 784, Paragraph 3 of the Corporate Law of Japan, Komatsu will not seek the approval of a General Meeting of Shareholders as stipulated in Article 783, Paragraph 1 of the Corporate Law.

2)Method of the Absorption-Type Corporate Split
Komatsu shall be the split company and Komatsu Industries shall be the successor company.

3)Substance of the Split-Related Allotment of Shares
Because the Absorption-Type Corporate Split shall be engaged between the parent company and its wholly owned subsidiary, the successor company shall not allocate any shares to the split company at the time of the Absorption-Type Corporate Split.

4)Decrease in Capital and Other Matters due to the Absorption-Type Corporate Split
There is nothing applicable.

5)Treatment of Stock Acquisition Rights and Bonds with Stock Acquisition Rights of the Split Company
There is nothing applicable.

6)Rights and Obligations to be Succeeded by the Successor Company
(1) Assets, Liabilities and Contractual Status of All Other Rights and Obligations
In accordance with the Absorption-Type Corporate Split Agreement which was reached by Komatsu and Komatsu Industries on December 15, 2009, Komatsu Industries, as the successor company, shall take over all assets, liabilities and contractual status of all other rights and obligations thereof as of the effective date.

(2) Rights and Obligations Related to Employment Contract
Komatsu Industries shall not succeed to rights and obligations of the employment contract which was signed by employees, who engage mainly in work belonging to the Absorption-Type Corporate Split, and Komatsu.

7)Outlook for Fulfillment of Obligations
Komatsu believes that there is no question of fulfillment of obligations by Komatsu and Komatsu Industries on and after the effective date of the Absorption-Type Corporate Split.

1)Business Activities of the Business to Be Split-Off
Development, sales and service of large presses in Japan (Komatsu will continue to produce large presses.)

Komatsu believes that effects of the Absorption-Type Corporate Split on its consolidated business results will be minimal.


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