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Notice with Respect to Basic Agreement for the Integration of Onkyo and Home AV Business of Pioneer

September 12, 2014

Onkyo Corporation (Head Office: Osaka City; President and CEO: Munenori Otsuki; hereinafter “Onkyo”) and Pioneer Corporation (Head Office: Kawasaki City, Kanagawa Prefecture; President and CEO: Susumu Kotani; hereinafter “Pioneer”) executed a basic agreement (the “Basic Agreement”) today to integrate Onkyo with Home AV business, phone business and headphone-related business of Pioneer, as follows (the “Integration”). Through the Basic Agreement, Onkyo and Pioneer agreed for Pioneer to acquire a minority stake in Onkyo, for Onkyo to acquire all the outstanding shares of Pioneer Home Electronics Corporation (“PHE”) which is a wholly-owned subsidiary of Pioneer, and for Onkyo and PHE to amalgamate.

Purposes and Background

Onkyo, Pioneer and Baring Private Equity Asia reached a basic agreement to commence concrete discussions towards integrating a part of the Home AV business of Onkyo and Pioneer as announced on June 24, 2014 in “Basic Agreement for Capital/Business Alliance in Home AV Business,” and the three parties intensively discussed to reach a definitive agreement. The three parties, however, ceased discussions as they decided that the Home AV business needs to be considered from a long-term perspective as the business must be developed strategically and flexibly to quickly respond to the continuously changing business environment. The three parties therefore agreed that it would be more efficient for the two strategic parties, Onkyo and Pioneer, to directly discuss the Integration without financial sponsor.

Thereafter, as a result of discussions held between Onkyo and Pioneer concerning the Integration, the two parties reached a basic agreement to integrate Onkyo and Home AV business, phone business and headphone-related business of Pioneer Group (hereinafter collectively referred to as the “Business of Pioneer”). The parties then executed the Basic Agreement and commenced concrete discussions towards the Integration.

Onkyo and Pioneer will mutually and effectively utilize their advantages in resources such as brand power and the-best-of-its-kind technologies, and thereby improve cost competitiveness and maximize synergies. Each brand continues to stay in the market after the planned transaction.