PALO ALTO, Calif. - Dec. 19, 2003 - Varian Medical Systems (NYSE:VAR)today announced that it has signed its agreement with Mitsubishi Electric Corp. this week to enter a joint venture that will provide radiotherapy equipment and service in Japan and other Asian countries. In accordance with a letter of intent announced by the companies on October 8, Mitsubishi Electric Corp.'s radiotherapy service business will be transferred to the joint venture that will commence operation this February. The venture will sell, service, and support Varian Medical Systems' full line of radiotherapy products and Mitsubishi Electric Corp.'s medical linear accelerators. Sales of Mitsubishi medical linear accelerators will be discontinued after the first two years of the arrangement. The venture also will service Mitsubishi's industrial linear accelerators. Varian Medical Systems, the majority owner of the venture, will acquire Mitsubishi Electric Corp.'s share of the venture at the end of the three-year arrangement. The joint venture is expected to contribute $10 million to $12 million in additional annual service revenue to Varian Medical Systems and be neutral to earnings in the first year and accretive in ensuing years. Based on the expected performance of the venture, Varian's investment in the transaction is expected to be in the range of $18 million to $20 million.
Varian Medical Systems And Mitsubishi Electric Corp. Complete Agreement For Joint Venture In Japan, Asia
19. December 2003