Hitachi 2009 Annual Report Download - page 92

The Company is currently evaluating the fair values to be assigned to assets and liabilities of Hitachi Kokusai Electric at the
acquisition date.
On a pro forma basis, revenue, net loss and the per share information of the Company with assumed acquisition dates for
Hitachi Kokusai Electric of April 1, 2008 and 2007 would not differ materially from the amounts reported in the accompanying
consolidated financial statements as of and for the years ended March 31, 2009 and 2008.
On January 14, 2009, the Company also announced its decision to purchase additional shares of Hitachi Koki Co., Ltd.
(Hitachi Koki), an equity method affiliate, through a tender offer to make Hitachi Koki its subsidiary for the purpose of establishing
a stable equity-based relationship and strengthening the cooperative relationship in business expansion on a global scale and
research and development into lithium-ion battery-operated products. Hitachi Koki’s Board of Directors resolved to approve
the tender offer at the meeting held on the same day. The price of the tender offer was ¥1,300 ($13.27) per share, which was
determined by comprehensively taking into consideration the market price of Hitachi Koki’s common stock, Hitachi Koki’s
financial condition, future earnings prospects and a valuation of Hitachi Koki stock conducted by a third party appraiser. The
price included a premium of approximately 77% over the average share price of Hitachi Koki’s common stock traded on the
First Section of the Tokyo Stock Exchange for three month period ended January 13, 2009. As a result, the Company purchased
12,473,000 shares, the upper limit for the number of shares in the tender offer, for ¥16,214 million ($165,449 thousand) in
the period from January 26, 2009 through March 9, 2009, resulting in the Company’s ownership increasing from 38.9% to
51.2%. Accordingly, the Company obtained control over Hitachi Koki and it became a consolidated subsidiary of the Company.
Therefore, the Company has consolidated Hitachi Koki as of March 31, 2009 in the consolidated balance sheet. The results
of operations of Hitachi Koki for the period from the acquisition date to March 31, 2009 were not material. Accordingly, the
results of operations of Hitachi Koki will be consolidated for the year beginning April 1, 2009.
The Company is currently evaluating the fair values to be assigned to assets and liabilities of Hitachi Koki at the acquisition date.
On a pro forma basis, revenue, net loss and the per share information of the Company with assumed acquisition dates for
Hitachi Koki of April 1, 2008 and 2007 would not differ materially from the amounts reported in the accompanying consolidated
financial statements as of and for the years ended March 31, 2009 and 2008.
On October 11, 2006, the Company signed a basic agreement with Clarion Co., Ltd. (Clarion) and decided to purchase
additional shares of Clarion through a tender offer at ¥230 per share. The purchase price of ¥230 per share was determined
by comprehensively taking into consideration the market price of Clarion common stock, Clarion’s financial condition, future
earnings prospects and a third party evaluation of the estimated value of Clarion stock, and included a premium of approximately
33% over average share price of Clarion common stock traded on the First Section of the Tokyo Stock Exchange for the three
month period immediately preceding October 10, 2006. As a result, the Company purchased a total of 139,108,174 shares
for ¥31,994 million in the period from October 25, 2006 through November 30, 2006, resulting in the Company’s ownership
increasing from 14.4% to 63.7%. Accordingly, the Company obtained control over Clarion and it became a consolidated
subsidiary of the Company effective December 7, 2006.
Clarion manufactures and sells in-vehicle equipment such as car audio and car navigation systems. The Company has
strategically targeted the automotive systems business and the purpose of the tender offer was to further expand its car
information system business.
The amount assigned to each major asset and liability caption of Clarion at the acquisition date is as follows:
Millions of yen
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 83,414
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,558
Goodwill (not deductible for tax purposes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,620
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (61,063)
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (38,568)
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,997)
Net assets previously acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,444)
Acquisition cost (including direct acquisition costs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,520)
90 Hitachi, Ltd.
Annual Report 2009