SMK Corp and Yamaichi Electronics Co Ltd abandoned discussions on their business integration.
The two companies have been in talks after reaching a basic agreement Nov 13, 2008, on their business integration. However, hit by the worsening financial conditions and the rapid economic downturn, they became concerned that the business integration will not necessarily benefit their shareholders, they said.
Moreover, both SMK and Yamaichi Electronics are expecting to post an operating loss for the fiscal year ending March 2009. Therefore, they stopped discussing their business integration to "give priority to and focus on each company's business reconstruction," according to SMK.
In accordance with the discontinuation of the business integration plan, the two companies will cancel all the share transfer procedures slated for late June 2009. Also, they will both remain listed on the Tokyo Stock Exchange and will not apply for delisting, which they planned to do in September 2009.
SMK and Yamaichi Electronics will maintain their good relationship and "intend to discuss measures to improve both companies' corporate values at appropriate times," SMK said.