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Komatsu Executes a Basic Agreement Regarding Integration of BIGRENTAL


WEBWIRE

Komatsu Ltd. (President: Kunio Noji) (gKomatsuh) has executed a basic agreement with Mr. Chikashi Shike, who is the Representative Director of BIGRENTAL CO., LTD. (gBRh) and who owns 42.1 % of the shares in BR, with an eye to integrating BR with Komatsu Rental Japan Ltd. (gKRh), which is a consolidated 100% subsidiary of Komatsu. Komatsu plans to integrate BR with KR by (i) acquiring 57.9% of the shares in BR from BRfs shareholders other than Mr. Shike, (ii) engaging in share exchange between KR and BR with a planned effective date of April 1, 2008, and (iii) merging BR with KR with a planned effective date of April 2009 or thereafter. After such integration, Komatsu and Mr. Shike will hold 79% shares and 21% shares, respectively, in the integrated company. Furthermore, the two parties tentatively plan to name the integrated company Komatsu Rental Ltd.

As the ratio of rental construction equipment used at civil engineering and construction sites in Japan is growing, Komatsu has positioned its rental business in the center of its gcirculationh business which is comprised of sales of new equipment, rental of equipment and reselling of used equipment, and has been strengthening the rental business segment centering on KR.

BR is a construction equipment rental company with a strong business presence in the Tohoku and northern Kanto regions of Japan. It has achieved high quality and a high utilization rate of its rental fleet through optimal applications of IT to its rental asset management system, while attaining a high share of the rental market with high-efficiency operations in only 10 years since its establishment.

This agreement represents mutual benefits for the two parties. Komatsu will be better positioned to expand its gcirculationh business on a global scale by introducing BRfs successful management know-how, which has achieved outstanding growth of the rental business, in order to further reinforce its rental business. Meanwhile, BR will be more strategically positioned for more opportunities to grow and gain larger management resources, including funds. In addition, geographical areas of rental operation run by KR and BR also highly complement each other, and thus synergy is expected to arise from the effective use of resources of KR and BR, such as personnel, assets and offices.

At the integrated company, Mr. Noriyuki Sudo, currently Representative Director and President of KR, will be appointed as Representative Director and Chairman and Mr. Chikashi Shike, currently Representative Director and President of BR, will be appointed as Representative Director and President of the integrated company.

[Outline of BIGRENTAL CO., LTD.]

Corporate name : BIGRENTAL CO., LTD.
Date of establishment : November 19, 1997
Location : 137 Bizendate 1-chome, Koriyama-shi, Fukushima-ken
Representative Director : Chikashi Shike
Capital : 1 billion yen
Shareholders : Chikashi Shike 42.1% , Leasing companies, etc. 57.9 %
Net sales : 16.9 billion yen (fiscal year ended March 31, 2007)
Business activities : Rental of construction equipment and materials
Operation bases : 70 retail facilities in 6 prefectures
Number of employees : 629

[Outline of Komatsu Rental Japan Ltd.]

Corporate name : Komatsu Rental Japan Ltd.
Date of establishment : October 1, 2006
Location : 16-15 Kanagawa 2-chome, Kanagawa-ku, Yokohama-shi, Kanagawa-ken
Representative Director : Noriyuki Sudo
Capital : 1 billion yen
Shareholders : Komatsu Ltd. (consolidated 100% subsidiary)
Net sales : 29.5 billion yen (fiscal year ended March 31, 2007)
Business activities : Rental of construction equipment and materials
Operation bases : 126 retail facilities in 18 prefectures
Number of employees : 950

[Outlook]

Komatsu believes this acquisition of shares will only have a minimal impact on its business performance for the current fiscal year.



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