Varian Medical Systems And Mitsubishi Electric Corp. Agree To Form Joint Venture In Japan | Varian

Varian Medical Systems And Mitsubishi Electric Corp. Agree To Form Joint Venture In Japan

Palo Alto, Calif. - October 8, 2003 - Varian Medical Systems(NYSE:VAR) and Mitsubishi Electric Corp. today announced that they have signed
a letter of intent to enter a joint venture that will provide radiotherapy
equipment and service in Japan and other Asian countries. Mitsubishi Electric
Corp.'s radiotherapy service business will be transferred to the joint
venture.

The joint venture, to be headquartered in Japan, is expected to start in
January of 2004, and will sell Varian Medical Systems’ full line of
radiotherapy products and Mitsubishi Electric Corp.'s medical linear
accelerators.  It will also service and support those products including
Mitsubishi industrial linear accelerators. The Mitsubishi medical linear
accelerators will be sold through the venture during the first two years of
the arrangement.

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. 
Financial terms of the transaction will be disclosed when the transaction is
concluded.

The arrangement covers all Mitsubishi Electric Corp.'s service and support
activities for an installed base of approximately 500 medical and industrial
linear accelerators in Japan and other countries mainly in Asia. 
Mitsubishi Electric Corp. and Mitsubishi Electric Systems & Service Co.,
Ltd, wholly owned subsidiary of Mitsubishi Electric Corp., will transfer
approximately 60 service, engineering, sales and management personnel out of
its current workforce on secondment to the joint venture, which will operate
within existing Varian facilities around Japan.

"We will continue a high level of service and support for all of this
venture's customers," said Soutaro Shinohara who will be managing director for
the joint venture.

"Customers and employees will benefit from this new venture, which combines
the expertise of both companies to more effectively meet the needs of
radiotherapy markets in Japan and Asia," said Dick Levy, Chairman and CEO of
Varian Medical Systems. “Customers who are equipped by both Varian
Medical Systems and Mitsubishi Electric Corp. will be able to obtain all the
service and products they need from a single source."

The companies expect to conclude the transaction in December.

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