News Release
January 29, 2013
To Whom It May Concern:
Funai Electric Co., Ltd.
Representative Director
President and CEO: Tomonori Hayashi(Code No.: 6839 First Section of TSE/OSE)

Notice of Acquisition of Lifestyle Entertainment Businesses of PHILIPS
Funai Electric Co., Ltd. (headquarters: Daito, Osaka; hereinafter, the “Company”) hereby provides notice that theCompany reached an agreement with Royal Philips Electronics (headquarters, the Netherlands; NYSE: PHG; AEX:PHIA, hereinafter, “PHILIPS”) to acquire all shares (hereinafter, the “Transaction”) in the company (hereinafter,the “New Company”) assuming operations (hereinafter, the “Operation”) of PHILIPS’ Lifestyle Entertainment
Business (Note).
(Note) The Lifestyle Entertainment Business involves the development and design, sales and (partial) manufacture ofthe following PHILIPS‐brand products.
Audio Video Multimedia productsHome Communication products
Accessories productsHome Audio, Headphone, Speaker, In‐car Audio, Video
related products, Portable Audio, Portable Video Player,
Home Media Player etc.
DECT Phone
Batteries, Cables/Connectors, Storage Products, PowerSolutions, Portable Chargers for Cell‐phone, Antennasetc.

The Transaction does not include the acquisition of business related to general‐purpose remote control equipment within
the Lifestyle Entertainment Business. In addition, as part of the Transaction, it has been agreed that the Optical Video
Business will transfer in 2017.

1. Reasons for Acquiring the Shares
In September 2008, the Company entered into a brand licensing agreement maintaining responsibility for thesourcing, distribution, marketing and sales activities of PHILIPS consumer televisions in the United States andCanada. Following this, in July 2012 the Company entered an agreement with PHILIPS involving the sale in theUnited States, Canada and Mexico of products that PHILIPS designed and developed through the Operation.
The Company has positioned the “strengthening and expanding existing businesses,” “making forays into newmarkets” and “developing new businesses” as the three pillars of its growth strategy. To achieve this growthstrategy, in addition to reinforcing existing management resources the Company has searched for growth
opportunities through business alliances and M&A activities with other companies such as those outlined above.
The Transaction to assume the Operation will enable the Funai Group to expand the lineup of products that ithandles and expand its sales region to include Asia, South America and other emerging markets, as well asadvanced countries in Europe. The Company decided to acquire shares in the New Company, based on the belief
that the acquisition would foster sustained growth of the Funai Group’s business.
2. Stock Acquisition Method
In the first half of FY 2013, PHILIPS will establish the New Company that will assume and manage the Operation,
and at the same time establish local subsidiaries and other bases under the New Company to handle theOperation in individual regions. Thereafter, these bases that are currently operating under PHILIPS will betransferred as functions of the Operation. By acquiring shares in the New Company as of the share transaction

date, the Company plans to assume the business handled by the Operation.
Through the New Company, the Company and PHILIPS aim to maintain the PHILIPS brand. For this purpose, thetwo companies plan to enter into a license agreement involving the use of trademarks for the initial term of fiveand a half years. Under this agreement, the Company will pay a fixed percentage to PHILIPS as a licensing fee.

3. Overview of the New Company(1) Name
Not yet determined (Note 1)(2) Location
Not yet determined (Note 1)
Name and Position of
Not yet determined (Note 1)(3)
Representative
Development, design, selling, and (partial) involvement in manufacturing of(4) Businesses
products of the Operation(5) Capital
Not yet determined (Note 1)
Expected Date ofIn the first half of FY 2013
(6)
Establishment
Principal Shareholders
Royal Philips Electronics 100%
(7)
and Ownership Ratios
No capital relationships requiring mention exist between
the Company and said company. Furthermore, noC a p i t a lparticularly notable capital relationships exist between
Re l a t i o n s h i p saffiliated persons or affiliated companies of the Companyand said company.
No personal relationships requiring mention exist
Relationships between
between the Company and said company. Furthermore,
Personal(8) the Listed Company andno particularly notable personal relationships exist
Relationships
Said Company
between affiliated persons or affiliated companies of theCompany and said company.
No transactional relationships requiring mention exist
between the Company and said company. Furthermore,
Transactionalno particularly notable transactional relationships exist
Relationships
between affiliated persons or affiliated companies of theCompany and said company.
Consolidated Operating Performance and Consolidated Financial Position of Said Company in Most
(9)
Recent Three Years (Note 2,3)
Fiscal Year‐End
December 31, 2009
December 31, 2010
December 31, 2011
Net Sales€ 1,861 million€ 1,774 million€ 1,575 million
Total Assets€ 532 million€ 574 million€ 513 million(Note 1) As the New Company is to be established in the first half of FY 2013, these decisions are not in place atpresent.
(Note 2) As the New Company is to be established in the first half of FY 2013, no such information is available.
(Note 3) The Operation is a division of PHILIPS and does not maintain its own financial statements as anindividual company. However, sales and total assets for the most recent three years are provided above as
reference figures.
4. Overview of Counterparty to the Share Acquisition(1)
Name
Royal Philips Electronics
Amstelplein 2 Breitner Center P.O. Box 77900 1070 MX Amsterdam The(2)
Location
Netherlands
Name and Position ofCEO Frans van Houten(3)
Representative
Development, design, selling, and (partial) involvement in manufacturing of(4)Businesses
healthcare, lighting and consumer products

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(5)
(6)
(7)
(8)

CapitalEstablished
Net Assets
Total Assets€ 191 million (As of September 30, 2012)
May 15, 1891
€ 12,081 million (As of September 30, 2012)€ 29,077 million (As of September 30, 2012)
Southeastern Asset Management
5.05%
Dodge & Cox
4.80%
Royal Philips Electronics
3.38%
Franklin Resources
1.94%
Principal Shareholders
Blackrock1.36%(9)
and Ownership Ratios
Vanguard Group
1.25%
Harris Associates
0.99%
ING Investment Management
0.72%
Fidelity Management Research
0.65%
Artisan Partners Holdings
0.54%
No capital relationships requiring mention exist between
the Company and said company. Furthermore, noC a p i t a lparticularly notable capital relationships exist between
Relationships
affiliated persons or affiliated companies of the Companyand said company.
No personal relationships requiring mention exist between
the Company and said company. Furthermore, no
Personal
particularly notable personal relationships exist between
Relationships
affiliated persons or affiliated companies of the Companyand said company.
Relationships between
The Company has entered into licensing agreements with(10) the Listed Company andthis company involving the PHILIPS and Magnavox brands.
Said Company
In addition, the Company’s subsidiaries—P&F USA Inc. andTransactional
P&F MEXICANA, S.A. DE C.V.—conduct sales activities inRelationships
the United States, Canada, Mexico, etc of PHILIPS‐brand(Note)consumer televisions and video‐related equipment (DVDplayers and recorders, Blu‐ray disc players and otherproducts).
Said company has no people with relevant relationships toPe o p l e w i t h
the Company. Furthermore, no affiliated persons orRelevantaffiliated companies of said company have people withRelationships
relevant relationships to the Company.
(Note) The transactional relationship was as described above during the Company’s most recent fiscal year.
However, since the end of the most recent fiscal year, the Company’s subsidiary, P&F USA Inc., entered into an
exclusive distribution agreement with this company’s subsidiary involving the Operation’s products. Based on thisagreement, P&F USA Inc. accepts supplies from this company of the Operation’s products, which it sells in theUnited States, Canada and Mexico.
5. Number of Shares Acquired, Acquisition Price and Status of Held Shares Before and After Acquisition
Ratio of the number ofs h a r e s h e l d t o t h e 0.0%
(1)
number of shares issued (Ratio of voting rights: ― %)prior to transfer
Ratio of the number of(2) shares acquired to the100%
number of shares issued
Shares of the New Company’s stock¥ 17,250 million (Note 1,2)
(3) A c q u i s i t i o n P r i c e
Advisory fees, etc. (approximate amount)¥ 830 million (Note 1,3)

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Total (approximate amount)¥ 18,080 million

Ratio of the number ofs h a r e s h e l d t o t h e 100.0%(4)
number of shares issued (Ratio of voting rights: 100.0%)
after transfer(Note 1) These calculations assume an exchange rate of ¥115 to the euro.
(Note 2) The acquisition price of the New Company’s shares is expected to be as indicated above.
However, this figure is expected to be adjusted based on the Operation’s cash and deposits, interest‐bearing
liabilities, tangible fixed assets, working capital as of the share transfer date.
(Note 3) Advisory fees, etc., are approximations. This total includes amounts for the payment of advisory fees forthe services of financial advisors, legal advisors, accounting advisors and tax advisors, as well as other costs
related to the acquisition of the New Company’s shares.
6. Method of Procuring Funds
Costs for this acquisition are all to be funded through resources on hand.
7. Schedule
Conclusion of Share
(1)
January 29, 2013
Transaction Agreement
Expected Date of ShareWithin 2013 (Note)(2)
T r a n s f e r(Note) The share transfer date is expected to be during 2013, after conforming items related to competition laws
in various regions, including most probably the United States, Germany, Ukraine, Russia, Poland, Turkey, andTaiwan.
8. Future Outlook
Through the Transaction, the New Company is expected to become a consolidated subsidiary of the Company. At
present, the likely impact of these operations on the Company’s operating performance in future fiscal years isunder consideration. Notification will be provided promptly once this information is confirmed.
(Reference) Forecast of Consolidated Operating Performance for the Current Fiscal Year (As AnnouncedNovember 2, 2012) and Consolidated Operating Performance for the Preceding Fiscal Year(million yen)
Consolidated
Consolidated
Consolidated
Consolidated Net
Operating Income Ordinary IncomeNet Sales
Income (Loss)(Loss)(Loss)
Forecast of Consolidated
Operating Performance for
205,000(2,500)(4,100)(5,800)the Current Fiscal Year
(Year Ending March 31, 2013)
Consolidated Operating
Performance for the246,147
461
174(4,629)Preceding Fiscal Year
(Year Ended March 31, 2012)

Toru Fujii
Investors and Public Relations
E‐mail: investor_relations@funai.co.jp

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