Omron to Separate Its Healthcare Business

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Sunday, February 2, 2003

February 3, 2003

TOKYO - Omron will separate the business planning and marketing functions of its healthcare business and integrate these in a new company to be formed with wholly-owned development subsidiary Omron Institute of Life Science Co., the company announced last week.

The new company will be positioned as a specialist manufacturer of medical equipment and provider of associated healthcare services and will initially be a wholly owned Omron Corporation subsidiary. Inauguration is tentatively set for July 1, 2003.

"Business opportunities in the medical-equipment and healthcare-service sectors are rapidly expanding. We have decided that to take full advantage of this growth, our healthcare business must be managed as an independent specialist manufacturer of medical equipment and provider of associated healthcare services," Omron Corporation CEO Yoshio Tateisi said.

Omron's healthcare business has established the Omron name as a leading world brand in the personal health equipment industry, as typified by Omron's 65% global market share for home-use blood-pressure monitors. Nevertheless, established business lines such as these monitors and thermometers face challenging medium-term prospects, given the slowing growth in the company's existing markets.

Meanwhile, rising medical costs are prompting healthcare providers to increasingly focus on early detection and treatment of lifestyle diseases (especially by promoting positive lifestyle changes). These developments are creating new business opportunities in the medical-equipment and healthcare-service sectors.

Against this backdrop, Omron has identified lifestyle disease monitoring as the new company's core growth domain. The company will focus resources on developing personal products in the medical healthcare-equipment and lifestyle disease-monitoring markets while working to enhance its ability to generate revenue growth.

To this end, Omron has concluded that its healthcare business should be conducted as a financially and managerially independent specialist manufacturer of medical equipment and provider of associated healthcare services. This decision culminated in a proposal to split its healthcare business off and integrate it with the development functions of OLS.

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