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*****For immediate use August 25, 2005

Canon Inc. to acquire shares of two NEC subsidiaries through tender offer, stock acquisition




TOKYO, August 25, 2005 --- Canon Inc. ("Canon"; President and CEO: Fujio Mitarai) and NEC Corporation ("NEC"; President: Akinobu Kanasugi) today announced that the two companies have entered into a basic agreement by which Canon will acquire shares of NEC subsidiary NEC Machinery Corporation ("NEC Machinery"; President: Isao Takasaki) by way of a tender offer, and will acquire 100% of the stock of ANELVA Corporation ("ANELVA"; President: Aritaka Imamura), currently owned by NEC, through stock acquisition. The move is aimed at strengthening the manufacturing capabilities of both Canon and NEC. If the acquisition of stock is realized, NEC Machinery and ANELVA will become consolidated subsidiaries of Canon.

Even with the change in NEC Machinery and ANELVA's parent company, they will continue to support NEC's manufacturing efforts by continuing and strengthening the development, supply and maintenance of semiconductor manufacturing devices for the NEC Group.

Looking ahead to the next ten years, Canon recognizes the need to realize new levels of cost reductions targeting the creation of next-generation businesses in order to further advance the company's Excellent Global Corporation Plan and achieve healthy growth. Canon considers the technologies possessed by NEC Machinery and ANELVA to be extremely beneficial for this purpose, which led to the decision to acquire the stock of these two companies.

NEC machinery possesses sophisticated technology regarding the design and manufacture of automation equipment. Canon believes that this technology will significantly contribute to the further advancement of its production reform activities, including the automation of assembly operations. Furthermore, Canon feels that ANELVA's high-vacuum thin film deposition technology will contribute greatly to the in-house production of manufacturing equipment indispensable to differentiate Canon products from the competition in various fields, including Canon's new SED (Surface-conduction Electron-emitter Display) business.

Both NEC Machinery and ANELVA are engaged in the semiconductor-manufacturing-devices business. For the time being, both companies will maintain their current operation structures, working to strengthen their businesses while pursuing synergies with Canon's business operations.

To date, the NEC Group has sold PCs and PC servers and has supplied semiconductors and electronic components to the Canon Group, and has also played a role in the creation of the Canon Group's internal information systems. The Canon Group has supplied semiconductor-manufacturing equipment, copying machines and other products to the NEC Group. As such, both companies have enjoyed a cooperative relationship that makes effective use of each other's core strengths.

Through the tender offer and stock acquisition by Canon, NEC anticipates the further growth and development of NEC Machinery and ANELVA. Accordingly, NEC has agreed to tender the shares of NEC Machinery owned by NEC in response to the tender offer by Canon, as well as to transfer all of its shares of ANELVA.

Going forward, Canon and NEC will pursue a cooperative relationship that capitalizes on the core competencies of both companies.

Also, at its board meeting today, NEC Machinery has resolved to comply with Canon's tender offer.

For an overview of the tender offer and stock acquisition, please refer to the attached document.

About Canon Inc.
Canon Inc. (NYSE: CAJ), headquartered in Tokyo, Japan, is a leader in the fields of professional and consumer imaging equipment and information systems. Canon's extensive range of products includes copiers, inkjet and laser printers, cameras, video equipment, medical equipment and semiconductor-manufacturing equipment. Originally established in 1937 as a camera manufacturer, Canon has successfully diversified and globalized to become a worldwide industry leader in professional and consumer imaging systems and solutions. With over 100,000 employees worldwide, Canon has manufacturing and marketing subsidiaries in Japan, the Americas, Europe, Asia and Oceania; and a global R&D network with companies based in the United States, Europe, Asia and Australia. Canon's consolidated net sales for fiscal 2004 (ended December 31, 2004) totalled $33.3 billion (at an exchange rate of 104 yen = US$1). Visit the Canon Inc. website at: www.canon.com/index.html

About NEC Corporation
NEC Corporation (NASDAQ: NIPNY) (FTSE: 6701q.l) is one of the world's leading providers of Internet, broadband network and enterprise business solutions dedicated to meeting the specialized needs of its diverse and global base of customers. Ranked as one of the world's top patent-producing companies, NEC delivers tailored solutions in the key fields of computer, networking and electron devices, by integrating its technical strengths in IT and Networks, and by providing advanced semiconductor solutions through NEC Electronics Corporation. The NEC Group employs more than 140,000 people worldwide and had net sales of 4,855 billion yen (approx. $45.4 billion) in the fiscal year ended March 2005. For additional information, please visit the NEC home page at: http://www.nec.com
* Newsroom: http://www.nec.co.jp/press/en/

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Outline of Tender Offer & Transfer of Subsidiary (Stock Acquisition)

Media Contacts:
Canon Inc.
Richard Berger
  Tel: +81-3-5482-8055
  E-mail: richard.berger@canon.co.jp
NEC Corporation
Diane Foley
  Tel: +81-3-3798-6511
  E-mail: d-foley@ax.jp.nec.com

The information contained in this press release is current only on the date that it is released. Please understand that this information may be outdated upon viewing. For current information please contact our media relations offices.

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