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Loewe and Sharp agree on the enhancement of LCD TV collaboration and Sharp's additional investment (15/12/2004)

The major Japanese electronics manufacturer Sharp Corporation (head office:Osaka, Japan President: Katsuhiko Machida; below:Sharp), and German exclusive TV manufacturer Loewe AG(head office: Kronach, Germany CEO:Dr. Rainer Hecker; below:Loewe) have agreed to strengthen their collaboration to meet the rapid expansion of European LCD TV market, and for Sharp to increase its stake in Loewe.

Loewe implements a capital increase of up to 2.8 million shares by utilizing the authorized capital. The existing Loewe shareholders are entitled to subscribe to new shares at 6,50 euros per share. The subscription period commences on December 15, 2004 and will end on December 30, 2004. Sharp has agreed to subscribe to up to 2.3 million of shares that may still be unsubscribed by existing shareholders. Sharp would thus increase its stake in Loewe from the previous 8.9 percent to up to 29 percent.

With this agreement, Sharp's additional investment will be EUR 15 million which is estimated to make Sharp Loewe's top shareholder. Sharp's participation in the capital increase is subject to approval by the relevant antitrust authorities. Loewe AG intends to apply to have the new shares admitted to stock exchange trading by mid-2005. An offering prospectus with regard to the capital increase will be prepared by that time.

In January 2005 Sharp and Loewe will establish a "Joint European Development Center" in Kronach. Its goal will be to continue to develop the completely digital electronics platform for LCD TVs and peripheral devices. The focus will be on the European broadcasting standard for digital television (DVB) and the development of an integrated HDTV receiver for high-definition television with best picture quality. From this partnership, both companies expect to have even more competitive products, speedier time to market and noticeable cost advantages. Loewe and Sharp will operate the development center jointly and it will be based in Kronach.

Furthermore, both companies plan to commence production of medium and large-screen LCD televisions in Kronach next year bearing the Sharp trademark. In return, Loewe will buy small-screen LCD TVs from Sharp according to Loewe's own specifications.

"The more intense cooperation with Sharp will open up additional contributions to Loewe's sales and earnings. This will make possible a sustained improvement of the financial situation starting in 2005. This definitely provides a further impetus for the turnaround that is already underway, with the goal of making Loewe profitable again as soon as possible," underscored Dr. Rainer Hecker, Chairman of the Executive Board of Loewe AG.

Toshishige Hamano, Corporate Senior Executive Director and responsible for the international business of the Sharp Corporation said, "As an established manufacturer of high-quality televisions, Loewe is the ideal partner for us in Europe. We are convinced that our strategic cooperation will strengthen both corporations, especially in the rapid development of the dynamically expanding LCD TV market."

It is estimated that LCD TV market will dynamically grow under the full-scale spread of digital and high definition broadcasting. Sharp and Loewe will enhance their cooperation by aiming at the progress of LCD TV and technology skill development, improvement in brand image and total competitiveness, and reinforcement and enhancement of business operating base.

www.loewe.de
www.sharp-world.com