Final Agreement Regarding Business Transfer of Automotive Brake Business —Establishment of New Company through Joint Investment— (Sep 3, 2007)

Aisin Seiki Co., Ltd. Sumitomo Electric Industries, Ltd.

Aisin Seiki Co., Ltd. (hereinafter, Aisin) and Sumitomo Electric Industries, Ltd. (hereinafter, Sumitomo Electric) announced that the two companies have established a new company subsequent to reaching a final agreement to transfer Sumitomo Electric’s automotive brake business to Aisin on October 1, 2007.

1. Background and Objectives of Business Transfer
Since having established ADVICS Co., Ltd. jointly with DENSO Corporation and Toyota Motor Corporation in July 2001 for developing and marketing brake systems for automobiles, the two companies have been separately handling the production of brake systems for automobiles.

Amid the rapid development and introduction of car electronics and IT in recent years, both the need for advanced technological development and even more intense competition in terms of cost for automotive parts are expected. Under such conditions, Aisin and Sumitomo Electric have determined that it is necessary to further accelerate efficiency and streamlining of production by integrating the two companies’ manufacturing divisions, in order to achieve further growth and expansion of the automotive brake business centering on ADVICS. The decision has been subsequently made to transfer Sumitomo Electric’s automotive brake business to Aisin, which is the parent company of ADVICS.

Through the business transfer, Aisin will further promote efficiency in terms of production with the aim of strengthening quality and cost competitiveness as well as expanding the scale of the brake business. Additionally, Sumitomo Electric will continuously promote the efficiency of the Group’s business operations together with concentrating its technological capabilities in automotive related fields in an effort to develop and expand sales of appealing new products and in turn further enhance corporate value.

2. Main Details of the Final Agreement
A new company related to the automotive brake business will be established by the two companies, in which manufacturing activities will continue at the existing production sites in the foreseeable future by assigning employees from Sumitomo Electric. In order to successively promote the transfer of production and facilities to Aisin thereafter, the new company will be treated as a temporary company until the production transfer to Aisin is completed.
In addition, Aisin will acquire shares of SEI Brake Systems (Thailand), Ltd., a subsidiary in Thailand, through a share transfer.


3. Overview of the New Company

Company name:	AS Brake Systems Inc.
Head office:	1-1-1, Koyakita, Itami, Hyogo, Japan (located within the Itami Works of Sumitomo Electric Industries, Ltd.)
Representative:	Katsuki Shindo (Currently President, Sumitomo (SEI) Brake Systems, Inc.)
Capital:	250 million yen (investment ratio: Aisin 80%; Sumitomo Electric 20%)
Date of establishment:	September 3, 2007
Start of operation:	October 1, 2007
Manufactured products:	Automotive disk brakes, brake pads, antilock brake systems
Sales:	Approximately 50 billion yen (forecast for fiscal 2008)
Employees:	Approximately 1,000 persons

Reference
SEI Brake Systems (Thailand), Ltd.

Head office:	Rojana Industrial Park, Rayong Province, Thailand
Representative:	Akinobu Hayahara
Capital:	150 million baht
Manufactured products:	Brake pads for automobiles
Sales:	Approximately 600 million baht
Employees:	Approximately 120 persons