Kodak Completes Tender Offer for Chinon Industries, Inc.

Feb. 27, 2004 Eastman Kodak Company today announced that, through its Japanese subsidiary, it has succeeded in acquiring 87.3% of the voting rights of Chinon Industries, Inc. Having acquired super-majority control of Chinon, and pursuant to the approval of the relevant Japanese governmental authorities, Kodak intends to implement a cash-for-stock swap between its subsidiary and Chinon as scheduled, and to de-list Chinon from the Tokyo Stock Exchange.

Kodak initiated the tender offer on January 23, 2004, and the tender offer period closed yesterday. Kodak intends for Chinon to become a wholly owned subsidiary of Kodak Japan, Ltd. after the cash-for-stock swap. Chinon also will merge with Kodak's Digital Camera Research and Development center in Yokohama, Japan.

The move will help

"Our highly successful collaboration with Chinon began nearly 10 years ago and has evolved over time in response to the growing market for digital products," said Yusuke Kojima, General Manager, Worldwide Digital Camera and System Development, Digital & Film Imaging Systems, Eastman Kodak Company. "The successful completion of this tender offer and cash-for-stock swap process allows Chinon and Kodak to further enhance their position in the Japanese market, while simultaneously strengthening their position worldwide."

Susumu Cho, president of Chinon, and the Chinon board of directors unanimously voted to support this transaction. Chinon's board previously noted that, by becoming a wholly owned subsidiary of KJL, the company would enhance its well-developed capabilities in research and development, engineering, operations, and manufacturing.

"As a result of this acquisition, both Chinon and Kodak will be in stronger and more competitive positions, with an increased ability to bring innovative products to customers in Japan and around the world," Cho said.

Chinon Industries, established in 1948, is engaged in research, development, and manufacturing of digital cameras. Kodak is Chinon's largest customer, accounting for nearly 100 percent of Chinon's revenue for its fiscal year ended March 31, 2003, which was Y29,892M, or about $280 million at current exchange rates.

About Eastman Kodak Company and infoimaging

Kodak is the leader in helping people take, share, print and view images - for memories, for information, for entertainment. The company is a major participant in infoimaging, a $385 billion industry composed of devices (digital cameras and flat-panel displays), infrastructure (online networks and delivery systems for images) and services & media (software, film and paper enabling people to access, analyze and print images). With sales of $13.3 billion in 2003, the company comprises several businesses: Health, supplying the healthcare industry with traditional and digital image capture and output products and services; Commercial Printing, offering on-demand color printing and networking publishing systems; Commercial Imaging, offering image capture, output and storage products and services to businesses and government; Display & Components, which designs and manufactures state-of-the-art organic light-emitting diode displays as well as other specialty materials, and delivers optics and imaging sensors to original equipment manufacturers; and Digital & Film Imaging Systems, providing consumers, professionals and cinematographers with digital and traditional products and services.

Editor's Note: For additional information about Kodak, visit our web site on the Internet at: www.kodak.com

   (ENGLISH TRANSLATION OF PRESS RELEASE ANNOUNCED IN JAPAN)

February 27, 2004

To whom it may concern

         KODAK Japan Digital Product Development Company, Ltd.

Tender Offer Results

Please be advised that the tender offer for CHINON INDUSTRIES INC.'s

common stocks (Head Office: Chino-shi, Nagano, Representative Director

& President: Susumu Cho, listed on the Tokyo Stock Exchange Second

Section, Code No. 7738), which was initiated on January 23, 2004, was

closed on February 26, 2004, and the result of the tender offer is as

follows:

1.  Overview of Tender Offer (Announced on January 22, 2004)

    1)  Name and Address of Tender Offeror

        KODAK Japan Digital Product Development Company, Ltd.

        27-1, Shinkawa 2-chome, Chuo-ku, Tokyo, JAPAN

    2)  Name of Target Company:  CHINON INDUSTRIES, INC.

    3)  Class of Shares or Other Securities Targeted:  Common Stock

    4)  Tender Offer Period:  January 23, 2004 (Friday) to

        February 26, 2004 (Thursday) (35 days)

    5)  Tender Offer Price: Y350 per share

2.  Result of Tender Offer

    1)  Number of Shares or Other Securities Tendered and Purchased

        Total Number of Shares Targeted:             9,306,161 shares

              Number of Shares Targeted:             9,306,161 shares

              Number of Shares to Exceed:                 0 shares

        Total Number of Shares Tendered:             6,394,552 shares

        Total Number of Shares Purchased:            6,394,552 shares

    2)  Success and Failure of Tender Offer

        All tendered shares will be purchased.

        Total Number of Tendering Shareholders:      846

        Total Number of Shares Tendered:             6,394,552 shares

        Total Number of Shares Purchased:            6,394,552 shares

        Total Number of Shares to be Returned:          0 shares

    3)  Calculation Method of Purchase on a pro rata basis

        N/A

    4)  Number of Owned Shares and Ownership Ratio after Tender Offer

        (Figures rounded to nearest third decimal)

          Number of Shares held by Tender Offeror before Tender Offer:

                                      0 shares ( 0% of voting rights)

          Number of Shares held by Specially Related Parties before

          Tender Offer:

                           13,550,200 shares (63.79% of voting rights)

               (Total)     13,550,200 shares (63.79% of voting rights)

          Number of Shares held by Tender Offeror after Tender Offer:

                            6,394,552 shares (27.98% of voting rights)

          Number of Shares held by Specially Related Parties after

          Tender Offer:

                           13,550,200 shares (59.28% of voting rights)

               (Total)     19,944,752 shares (87.26% of voting rights)

(Note) For the purpose of calculating the ownership percentage of

shares before the Tender Offer, the number of voting rights of all

shareholders of the Target Company is deemed to be 21,240, which is

the number of voting rights of all shareholders appearing in the

Semi-Annual Report filed by the Target Company on December 17, 2003.

For the purpose of calculating the ownership percentage of shares

after the Tender Offer, the number of voting rights of all

shareholders of the Target Company is deemed to be 22,856. (Because

the shares constituting less than a whole unit are also included in

the target shares of this Tender Offer, the number of voting rights of

all shareholders is increased by 1,616, which is the number of voting

rights represented by shares constituting less than a whole unit

(1,616 voting rights represented by 1,616,161 shares is obtained by

subtracting from 1,616,383 shares constituting less than a whole unit

according to the above Semi-Annual Securities Report, the aggregate

total of (i) 200 shares constituting less than a whole unit held by

KODAK JAPAN LTD. ("KJL"), which will not be purchased through this

Tender Offer, and (ii) 22 shares constituting less than a whole unit

held by the Target Company, which will not be purchased through this

Tender Offer.)

    5)  Funds to be needed for Purchase:  Y2,358 million

3.  Method and Commencement Date of Settlement

    1)  Name and Address of Head Office of Securities Company/Bank,

        etc. in Charge of Settlement

        Nomura Securities Co., Ltd.

        9-1 Nihonbashi 1-chome, Chuo-ku, Tokyo

    2)  Commencement Date of Settlement

        March 4, 2004 (Thursday)

    3)  Method of Settlement

        The notice of purchase through the Tender Offer will be mailed

        to the respective addresses of the tendering shareholders (or

        the standing proxy in case of Non-Japanese Shareholders)

        without delay after the end of the Tender Offer period.

        Payment of the purchase price will be made in cash. The Tender

        Offer Agent will, pursuant to the tendering shareholders'

        instruction, remit the purchase price of the share

        certificate(s) that are purchased without delay after the

        commencement date of settlement to the place designated by the

        tendering shareholder, or pay at the head office or branch

        offices of the Tender Offer Agent.

4.  Place to make a copy of the Tender Offer Report available for

    Public Inspection

        KODAK Japan Digital Product Development Company, Ltd.

        27-1, Shinkawa 2-chome, Chuo-ku, Tokyo, JAPAN

        Tokyo Stock Exchange, Inc.

        2-1, Nihonbashi Kabuto-cho, Chuo-ku, Tokyo

5.  Scope

        KODAK Japan Digital Product Development Company, Ltd. and

        CHINON INDUSTRIES INC. obtained approval of a

        business-restructuring plan from the Ministry of Economy,

        Trade, and Industry, pursuant to the Law on Special Measures

        for Industrial Revitalization ("IRL") on January 22, 2004.

        After the Tender Offer, pursuant to the business restructuring

        plan, it is planned that (i) the Tender Offeror accepts a

        contribution in kind from KJL consisting of all the shares in

        the Target Company held by KJL (59.02% for the total number of

        issued shares) and, then, increases its capital, (ii) the

        Tender Offeror and the Target Company procure approval of the

        competent Minister for the share exchange through delivery of

        cash pursuant to the business restructuring plan and, then,

        implement the share exchange through delivery of cash pursuant

        to the provisions of Article 12-9 of the IRL, (iii) thereafter

        the Tender Offeror acquires from KJL the businesses of: (x)

        design, development and quality assurance of digital cameras

        for Eastman Kodak Company ("EKC"), and (y) development and

        management of suppliers of ODM (Original Design Manufacturing)

        digital cameras for EKC and development of manufacturers of

        accessory products, through a business transfer or other

        method, and (iv) ultimately the Tender Offeror merges into the

        Target Company. More specifically regarding the share

        exchange, pursuant to the business restructuring plan, the

        Tender Offeror plans to deliver cash, in lieu of delivering

        shares in the Tender Offeror, to the remaining shareholders of

        the Target Company in exchange for shares in the Target

        Company. Further, since the aggregate voting rights of the

        shares in the Target Company that the Tender Offeror acquired

        through the Tender Offer and of the shares in the Target

        Company that the Tender Offeror plans to acquire from KJL

        after the Tender Offer has become two-thirds (2/3) or more of

        the voting rights of all shareholders of the Target Company,

        the Tender Offeror and the Target Company plan to utilize the

        special measure related to the simplified share exchange

        (kan-i kabushiki kokan) prescribed by Article 12-4, Paragraph

        2 of the IRL, with respect to the Target Company in accordance

        with the business restructuring plan. At the time of the share

        exchange, the shareholders of the Target Company (which will

        become a wholly-owned subsidiary of the Tender Offeror) will

        have the right to require the Target Company to purchase the

        shares in the Target Company owned by them, in accordance with

        procedures prescribed by law.

        Furthermore, if the share exchange is implemented as planned,

        by which the Target Company will become a wholly owned

        subsidiary of the Tender Offeror and the Tender Offeror will

        become the sole shareholder of the Target Company, then the

        shares in the Target Company will be delisted.

        Contact Details:

        Akinori Yabata

        KODAK JAPAN LTD.

        Office of the President

        Tel:  81-3-5540-2215

        Fax:  81-3-5540-2216

        E-mail:  This email address is being protected from spam bots, you need Javascript enabled to view it

    (Note: This is an English translation of the press release

announced in Japan. In case of any conflict between this English

translation and the Japanese language original, the meaning of the

Japanese language original shall prevail.)

back to the front page digital camera news