Sumitomo Metal Micro Devices Inc. (SM Micro Devices), a fully-owned subsidiary of Sumitomo Metal Industries Ltd (Sumitomo Metals), has agreed with Hokuriku Electric Industry Co. Ltd (Hokuriku Electric) to make a capital and business alliance. As the first step, Hokuriku Electric will purchase a 19.0% stake of outstanding common shares of SM Micro Devices, which is currently held by Sumitomo Metals, on 2 November 2009. For the next step, the Systems Division of Hokuriku Electric and SM Micro Devices will merge to a new company (80% owned by Hokuriku Electric and 20% by Sumitomo Metals) by August 2010, with an aim to strengthen services to customers, jointly conduct purchasing and product development, and mutually complement manufacturing bases of each other. At the time of establishing a new company in the targeted month of August 2010, Sumitomo Metals plans to purchase some treasury stock of Hokuriku Electric, responding to their purchase of shares of the new company, in order to enhance mutual trust and a cooperative relationship of the two companies and make the deal more effective.
