Matsushita Announces Plans to Maximize Shareholder Value

    Business Editors

    OSAKA, Japan--(BUSINESS WIRE)--April 28, 2005--Matsushita Electric Industrial Co., Ltd. (Matsushita (NYSE symbol: MC)), best known for its Panasonic brand, announced that with the aim of maximizing shareholder value, Matsushita has implemented a wide range of initiatives, including business restructuring and the establishment of a business domain-based organizational structure. For the year ending March 31, 2006 (fiscal 2006), which is the midpoint in Matsushita's 3-year Leap Ahead 21 plan, the company will continue to accelerate growth strategies. Furthermore, the company will proactively return profits resulting from achievement of the Leap Ahead 21 plan to shareholders. Meanwhile, Matsushita decided to adopt a policy regarding potential large-scale purchases of Matsushita shares. Specifically, prospective large-scale purchasers would be required to provide Matsushita's Board of Directors with sufficient information about such large-scale purchases, including the purpose, basis for determination of purchase price and other relevant details. The reason for adopting this policy is to provide shareholders of Matsushita with sufficient information to make appropriate decisions regarding large-scale purchases of Matsushita shares. The policy would also stipulate that sufficient time be allowed Matsushita's Board of Directors to evaluate information provided by the prospective large-scale purchaser. Matsushita will continue to implement policies that enhance transparency of the company's management, based on the basic philosophy that the final decision regarding any large-scale purchase of Matsushita shares principally rests with shareholders. In this way, Matsushita will continue to promote shareholder-oriented management, aiming to maximize shareholder value.

    1. Acceleration of the Growth Strategy to Achieve Leap Ahead 21 Plan

    The following are specific initiatives within the Leap Ahead 21 plan for fiscal 2006.

1) Establishment of a technology- and intellectual property-oriented company 2) Enhancement of product competitiveness through development of V-products 3) Aggressive strategic capital investments 4) Strengthening overseas businesses 5) Synergy benefits through collaboration between Matsushita and Matsushita Electric Works, Ltd. (MEW). (see attachment for details about the above)

    2. Proactive Return of Profits to Shareholders

    In addition to carrying out initiatives within the Leap Ahead 21 plan, Matsushita will implement shareholder-oriented management by providing returns to shareholders based on consolidated business performance.

    Basic Policy for Providing Return to Shareholders

    Matsushita aims to maximize shareholder value by enhancing its reputation in capital markets through the steady growth of its mid-term business performance and return of profits to shareholders, based on its consolidated business performance.
    In particular, Matsushita will provide return to shareholders through dividend payments and own share repurchases, upon careful consideration of consolidated cash flows.

1) Dividends

Matsushita aims for promoting stable and continuous growth of return to shareholders, while at the same time taking into consideration various factors including mid-term business performance, capital expenditure requirements and the company's financial condition.

2) Own share repurchases

Matsushita will provide return to shareholders by enhancing shareholder value per share through a reduction, in effect, of the number of outstanding shares by way of repurchasing the company's own shares.

Return to Shareholders for Fiscal 2006, ending March 2006

1) Dividends

Matsushita plans to increase total dividends per share for fiscal 2006 to 20 Yen (10 yen per share as an interim dividend and 10 yen per share for the year-end dividend), from the planned 15 yen for fiscal 2005, ended March 2005.

2) Own share repurchases

Matsushita will continue to repurchase the company's own shares to further enhance shareholder value per share. From May 2, 2005 to late March 2006, Matsushita plans to repurchase up to 120 million shares of its own stock for a maximum of 150 billion yen.

    3. Policy toward Large-scale Purchases of Matsushita Shares (ESV* Plan)

    With recent trends toward globalization of capital markets, corporate acquisitions are likely to increase in Japan. Under such circumstances, Matsushita believes that management with a mid- to long-term vision will maximize overall profit for shareholders, especially in the manufacturing industry, which can require 10 to 20 years to develop innovative technologies into products.
    Under the basic philosophy that shareholders should make final decisions regarding large-scale purchases of Matsushita shares, Matsushita established a new policy regarding such potential purchases. The new policy outlines certain rules that the company believes are in the best interests of shareholders as a whole.
    The above-mentioned rules stipulate that prospective large-scale purchasers (those who intend to acquire 20% or more of all voting rights) should provide, to Matsushita's Board of Directors, information such as an outline of the large-scale purchaser, the purpose and conditions of the large-scale purchase, the basis for determination of purchase price, funds procurement details, as well as any management policies or business plans that would be adopted after the completion of the large-scale purchase. Furthermore, the new rules require that a prospective large-scale purchaser grant Matsushita's Board of Directors a sufficient period of time (60 or 90 days) to assess the information provided. The Board of Directors will assess and examine the proposed large-scale purchase for the benefit of all shareholders of Matsushita, and subsequently disclose the opinion of the Board of Directors. Furthermore, the Board of Directors will provide shareholders with necessary information so that they may make appropriate decisions in regards to the proposed large-scale purchase. In addition, Matsushita's Board of Directors may, as it deems necessary, negotiate with prospective large-scale purchasers to improve the terms of the proposal or offer alternative plans to shareholders.
    In the event of non-compliance with such rules by a prospective large-scale purchaser, the Board of Directors may take countermeasures, including stock splits or the issuance of stock acquisition rights, in order to protect the interests of shareholders as a whole. Matsushita today also filed a shelf registration statement with the Japanese regulatory authorities for possible issues of stock acquisition rights.

    For further details, see separate press release issued today, Matsushita Announces Policy toward Large-scale Purchases of Matsushita Shares (ESV plan).

    Disclaimer Regarding Forward-Looking Statements

    This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Matsushita and its Group companies (the Matsushita Group). To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Matsushita Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Matsushita Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Matsushita undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Matsushita in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
    The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, Asian currencies and other currencies in which the Matsushita Group operates businesses, or in which assets and liabilities of the Matsushita Group are denominated; the ability of the Matsushita Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the ability of the Matsushita Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Matsushita Group to maintain competitive strength in many product and geographical areas; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Matsushita Group has holdings; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes and other events that may negatively impact business activities of the Matsushita Group.

    * ESV stands for Enhancement of Shareholder Value.

    (Attachment)

    Acceleration of the Growth Strategy to Achieve Leap Ahead 21 Plan

    1. Establishment of a technology- and intellectual property-oriented company

    As a technology- and intellectual property-oriented company, Matsushita will continue to develop proprietary black-box technologies, while shifting management resources to priority R&D areas to achieve optimum results from R&D activities.

    2. Enhancement of product competitiveness through development of V-products

    Matsushita defines V-products as those that can attain top shares in high-volume markets and contribute to overall earnings. For fiscal 2006, Matsushita will continue to enhance V-products which include black-box technologies, eco-friendly innovations and incorporate universal design concepts. Matsushita aims for total sales of V-products in fiscal 2006 of 1.5 trillion yen for 67 product categories.

    3. Aggressive strategic capital investments

    Matsushita will continue to concentrate capital investment on strategic businesses, particularly plasma display panel (PDP) TVs, which are expected to contribute significantly to overall growth. As the key component in digital products, semiconductors are another focus of Matsushita's capital investment.

    4. Strengthening overseas businesses

    The enhancement of profitability in overseas businesses is essential to the Leap Ahead 21 plan. Matsushita places particular priority on the high-growth Chinese market, aiming for sales of 1 trillion yen in fiscal 2007, ending March 2007.

    5. Synergy benefits through collaboration between Matsushita and MEW

    Through collaboration with MEW, which became a consolidated subsidiary of the company in April 2004, Matsushita will combine the strengths of the two companies to provide customers with a wide range of comfortable living solutions. Matsushita also expects to achieve increased sales of approximately 100 billion yen over the two-year period of fiscal 2006 and fiscal 2007. This will be achieved by launching new Collaboration V-products, which combine technologies of both companies, as well as restructuring of overlapping businesses and distribution systems.

--30--MEM/ny*

CONTACT: Matsushita Electric Industrial Co., Ltd. Media: International PR Akira Kadota (Tokyo), +81-3-3578-1237 or Panasonic News Bureau (Tokyo) +81-3-3542-6205 or Jim Reilly (U.S.), +1-201-392-6067 or Brendon Gore (Europe), +44-20-8899-2217 or Investor Relations: Makoto Mihara (Osaka), +81-6-6908-1121 or Panasonic Finance (America), Inc. Akihiro Takei (U.S.), +1-212-698-1365 or Panasonic Finance (Europe) plc Norio Iino (Europe), +44-20-7562-4400

KEYWORD: NEW YORK JAPAN INTERNATIONAL ASIA PACIFIC INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS MANUFACTURING SOURCE: Matsushita Electric Industrial Co., Ltd.

Copyright Business Wire 2005