About Konica Minolta

Giving Shape to Ideas

Minolta Co., Ltd.
May 15, 2003

Conclusion of a Stock Swap Contract for the Management Integration between Konica and Minolta

TOKYO, OSAKA (May 15, 2003) -- Konica Corporation (Fumio Iwai, president, TSE4902) and Minolta Co., Ltd. (Yoshikatsu Ota, president, TSE7753) resolved today, May 15, 2003, at the Board of Directors Meetings of both companies and concluded a stock swap contract based on "the letter of intent for the management integration", which is the basic agreement of the management integration through a stock swap, signed on January 7, 2003.

This contract is to be approved at the Ordinary General Shareholders' Meetings to be held on June 25, 2003 for Konica and on June 27, 2003 for Minolta. After getting its approval, Konica and Minolta will swap stocks on August 5, 2003, having Konica as a complete parent company and Minolta as a wholly owned subsidiary. After the stock swap, Konica will become a new integrated holding company, "Konica Minolta Holdings, Inc".

We have already announced the stock swap ratio on January 16, 2003, and we have confirmed, among others, by opinions of our respective financial advisors (Nomura Securities Co., Ltd. for Konica and Daiwa Securities SMBC Co., Ltd. for Minolta) that this ratio need not be changed since there is no significant change in the various prevailing conditions concerning stock swap ratio as agreed upon in "the letter of intent for the management integration".

  1. Stock Swap Ratio:

      Konica Corporation
    (complete parent company)
    Minolta Co., Ltd.
    (wholly owned subsidiary)
    Stock Swap Ratio 1 0.621
  2. Shares to be Issued
    Konica will newly issue 174,008,969 common shares for this stock swap, and for the shareholders in the Minolta's shareholders list (including beneficial shareholders) as of the day immediately before the swap date, Konica will allocate Konica's 0.621 common share for those who own Minolta's one common share. For this transaction, Konica will not pay stock swap grant to the Minolta's shareholders, however, dividend for the newly issued common shares will be calculated from April 1, 2003.

  3. Capital Increase and Capital Reserve
    Konica will not increase its stated capital for the stock swap transactions. Capital reserve will be increased pursuant to Clause 1-2 of Article 288-2 of the Commercial Code of Japan.

  4. Outline of the Companies Concerned in the Stock Swap

      As of March 31, 2003 As of March 31, 2003
    (1) Company name Konica Corporation Minolta Co., Ltd.
    (2) Business Manufacture and sale of photographic films and papers, photographic processing units, photographic chemicals, copiers, cameras, optical supplies, etc. Manufacture and sale of copiers, printers, cameras, optical units, radiometric instruments, planetariums, etc.
    (3) Establishment December 1936 November 1928
    (4) Head Office 26-2, 1-chome, Nishi-shinjuku, Shinjuku-ku, Tokyo 3-13, 2-chome, Azuchi-machi, Chuo-ku, Osaka
    (5) Representative Fumio Iwai, President Yoshikatsu Ota, President
    (6) Capital 37,519 million yen 25,832 million yen
    (7) Common stocks issued 357,655,368 shares 280,207,681 shares
    (8) Shareholder's equity 165,730 million yen 86,378 million yen
    (9) Total assets 363,817 million yen 269,196 million yen
    (10) Fiscal Year End March 31 March 31
    (11) Number of employees 4, 032 3,200
    (12) Major shareholders and ratio of their shares
    • Japan Trustee Services Bank, Ltd.
    • The Master Trust Bank of Japan, Ltd.
    • UFJ Bank Limited
    • The Bank of Tokyo-Mitsubishi, Ltd.
    • UFJ Trust Bank Limited
    • The Master Trust Bank of Japan, Ltd.
    • Daido Life Insurance Company
    • Sumitomo Mitsui Banking Corporation
    • Risona Bank, Limited
    • Japan Trustee Services Bank, Ltd.
  5. Business Results of the Last Three Fiscal Terms (Unconsolidated)

      Konica Corporation
    Fiscal Year Ended March 31, 2001 March 31, 2002 March 31, 2003
    Net Sales (millions of yen) 345,284 339,003 357,853
    Operating income (millions of yen) 17,817 16,327 24,028
    Recurring profit (millions of yen) 17,175 18,702 20,746
    Net income (millions of yen) 3,653 (29,928) 6,481
    Net income per share (yen) 10.21 (83.69) 18.00
    Shareholders' dividend per share (yen) 10 10 10*
    Shareholders' equity per share (yen) 550.61 456.18 463.77
      Minolta Co., Ltd.
    Fiscal Year Ended March 31, 2001 March 31, 2002 March 31, 2003
    Net Sales (millions of yen) 278,955 272,105 296,329
    Operating income (millions of yen) 8,352 3,088 22,253
    Recurring profit (millions of yen) 8,223 (1,531) 17,712
    Net income (millions of yen) 2,476 (33,596) 11,969
    Net income per share (yen) 8.84 (119.90) 42.74
    Shareholders' dividend per share (yen) 6 - 3*
    Shareholders' equity per share (yen) 359.00 265.22 308.60
    Shareholders' dividend per share for the fiscal year ended March 31, 2003 is subject to the approval of the Ordinary General Shareholders' Meetings of Konica and Minolta, respectively.
  6. The Date of Stock Swap
    It is scheduled on August 5, 2003.

  7. Outline of the New Company after the Stock Swap
    (The new company will be formed on condition that the stock swap contract is approved at the Ordinary General Shareholders' Meetings of Konica and Minolta.)

    Company name Konica Minolta Holdings, Inc.
    Nature of company Holding company
    Head office 1-6-1, Marunouchi, Chiyoda-ku, Tokyo
    Representatives President & Representative Executive Officer: Fumio Iwai Vice President & Representative Executive Officer: Yoshikatu Ota
    Capital 37,519 million yen
  8. Upcoming Schedule

    June 25, 2003 Konica's Ordinary General Meeting of Shareholders(Approval of the stock swap contract)

    June 27, 2003 Minolta's Ordinary General Meeting of Shareholders(Approval of the stock swap contract)

    June 28, 2003 Public notification requesting to submit Minolta's stock certificate

    August 4, 2003 Deadline for submitting Minolta's stock certificate

    August 5, 2003 Stock swap date, Establishment of Konica Minolta Holdings, Inc.

  9. After the stock swap scheduled on August 5, 2003, the medium-term business plan will duly be announced shortly.

Notice to U.S. Investors

This press release includes forward-looking statements that reflect the plans and expectations of Konica Corporation and Minolta Co., Ltd., in relation to the proposed share exchange and integration of management and the benefits resulting from them. To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. The forward-looking statements are based on the current assumptions and beliefs of Konica Corporation and Minolta Co., Ltd. in light of the information available to them, and involve known and unknown risks and uncertainties. Potential risks and uncertainties include, but are not limited to, the ability of Konica Corporation and Minolta Co., Ltd. to integrate their operations effectively, as well as the factors identified under "Forward-Looking Statements" of the Annual Report 2002 of Konica Corporation and "Disclaimer Regarding Forward-Looking Statements" of the Annual Report 2002 of Minolta Co., Ltd. Such risks, uncertainties and other factors may cause the actual results, performance or financial position of the new corporate group referred to in this press release to differ materially from those expressed or implied in the forward-looking statements. Konica Corporation and Minolta Co., Ltd. undertake no obligation to update publicly any forward-looking statements after the date of this press release.

This press release relates to a proposed share exchange which involves the securities of two Japanese companies, Konica Corporation and Minolta Co., Ltd. The share exchange is subject to Japanese disclosure requirements that are different from those of the United States. Financial information included in the document has been prepared in accordance with Japanese accounting standards that may not be comparable to the financial statements of United States companies.

It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal securities laws, since Konica Corporation and Minolta Co., Ltd. are located in Japan, and some or all of their officers and directors are residents of Japan. You may not be able to sue the companies or their officers or directors in a Japanese court for violations of the U.S. securities laws. It may be difficult to compel the companies and their affiliates to subject themselves to a U.S. court's judgment.

You should be aware that Konica Corporation and Minolta Co., Ltd. may purchase securities otherwise than under the share exchange, such as in open market or privately negotiated purchases.

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