Fuji Electric Holdings Co. Ltd., headquartered in Shinagawa-ku, Tokyo (“FHC”), announced that it had reached an agreement in principle with Schneider Electric Industries SAS, headquartered in Rueil-malmaison, France (“Schneider Electric”), defining their basic understanding in relation to creation of a joint venture in the field of electrical distribution and industrial control (ED&C) equipment products.

1. Objectives for formation of the Joint Venture
Fuji Electric FA Components & Systems Co. Ltd. (President: Mitsunori Shirakura, Headquarters: Chuo-ku, Tokyo) (“FCS”), a core operating company of FHC has engaged in ED&C equipment business as one of its core businesses and established a position as one of the most acclaimed ED&C companies in Japan and other Asian countries.

Schneider Electric is a recognized world leader in the field of ED&C and Automation with a strong presence in Europe, Asia and North America offering an unmatched worldwide support and service network.

By forming a joint venture under the shared business strategy for expanding business, FCS and Schneider Electric will further strengthen their ED&C products business through combining competitive advantage of the each company. The both companies will supply each other complementary products that would leverage its own strengths and share the both companies’ global network to allow their shared customers such as Japanese multinational corporations to benefit from a wide range of services and support network world-wide.

The Joint Venture will aim at becoming an industry-leading company in terms of quality, cost and product lineup and create new demand by expanding solution business with its strong marketing, consulting and technological capabilities accumulated through operations in Europe, North America and Japan. We believe that this new company will position us to be an unsurpassed global leader in the key product areas in Asia.

2. Detail of Basic Understanding
FHC and Schneider Electric have reached an agreement to form a new joint venture in association with ED&C business of the subsidiaries of the both companies, FCS and Schneider Electric Japan. Under the basic agreement, FHC will hold a majority 60% stake in the company, with Schneider Electric Japan Holdings (Chief Executive Officer: Pierre Leveque, Headquarters: Taito-ku, Tokyo) (“SEJH”) holding the remaining shares.

The both parties will continue discussions towards a definitive agreement with intent to establish the Joint Venture in July 2008.

1) Schedule for establishment of the Join Venture
Board Meeting for approval of Memorandum of Understanding (“MOU”) March 27, 2008
Conclusion of MOU March 27, 2008
Foundation of the Join Venture July 2008
Note: the date of foundation is subject to change upon consultation between the both companies.

2) Overview of the Joint Venture
Corporate name: TBD
Representative: TBD（Will be appointed from Fuji Electric Group）
Capital amount: TBD
Location: Chuo-ku, Tokyo
Scope of business: Development, manufacture and sales of and service provision for electrical distribution and control equipment
Sales: ¥70 billion (As of foundation)
Number of employees: Approximately 3,000

3. Overview of Concerned Companies

FCS and Schneider Electric have closely worked together for complementary supply of products in ED&C equipment business since November 2003 and established the joint venture manufacturing circuit breakers in Dalian, China in March 2004.

4. Business Forecast
FHC and Schneider Electric will continue to have discussions toward a definitive agreement for creating the Joint Venture and keep working together to obtain necessary regulatory approval both in and outside Japan, including that from anti-trust authority, in order to establish the new company in July 2008.The consolidated and unconsolidated business results for the fiscal year ending March 2008 will not be affected by this transaction. Expected impact on the business performance for the next fiscal year will be disclosed as soon as it is confirmed.

Courtesy of Fuji Electric