Recording

Marantz, Denon Complete Merger

D&M Holdings Inc., a joint holding company formed to merge the operations of Marantz Japan Inc. and Denon, announced yesterday the completion of the merger. 5/15/2002 8:00 AM Eastern

D&M Holdings Inc., a joint holding company formed to merge theoperations of Marantz Japan Inc. and Denon, announced yesterday thecompletion of the merger. The two companies will maintain theestablished Marantz and Denon brands. Denon's and Marantz’combined experience in the home theater, A/V consumer electronics andprofessional audio markets exceeds 130 years.

D&M Holdings (Sagamihara City, Japan) has succeeded Marantz as apublicly traded concern on the Second Section of the Tokyo StockExchange. Ripplewood Holdings LLC, Denon’s largest shareholder,will become the majority shareholder in D&M Holdings, which has1,650 employees around the world. Royal Phillips Electronics, whichowned 49% of Marantz Japan, now owns 14.7% in D&M Holdings.

Tatsuo Kabumoto, former chairman and CEO of Marantz who is nowpresident and CEO of D&M Holdings, said D&M Holdings willcapitalize on the strategic benefits resulting from the combinedcompanies. "The merged company formed will create a powerful force inthe premium home theater and audio-video market. By combining these twocompanies, D&M will be able to obtain significant improvements inmargins and cash flow. Moreover, D&M will be well-positioned totake advantage of the growth in this market segment given the highdemand of home theater products and the digitalization of this marketsegment," Kabumoto said.

All shares of Marantz and Denon were transferred to D&MHoldings, making both entities wholly owned subsidiaries. FormerMarantz shareholders received one share of D&M Holdings for eachMarantz share, and former Denon shareholders received 0.4416 shares ofD&M Holdings for each Denon share. Former Marantz shareholders willhold approximately 30% of the new company, and former Denonshareholders will own approximately 70% of the new company. The Denonand Marantz brand names will be maintained, as well as their sales andmarketing, and brand-specific product and distribution channels.