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Nippon Columbia Completes Previously Announced Transaction With Hitachi And Ripplewood, Raises Over Jpy 16.1 Billion For Financial And Operational Revitalization Plan, And Spins Off “Denon Ltd.” As Independent Company Under Ripplewood Control

Tokyo (October 2, 2001) -- Nippon Columbia Co., Ltd. (“Columbia”), Ripplewood Holdings L.L.C. (collectively “Ripplewood”), and Hitachi, Ltd. (“Hitachi”) closed their previously announced transaction today. This will enable a broad revitalization for Columbia through a capital infusion that includes the issuance of new equity securities by Columbia, and the spin-off of Columbia’s audio/visual hardware business (“DENON”). DENON has become a privately held concern. Columbia shareholders approved the revitalization plan in June of this year.

The key elements of the revitalization plan are as follows:

New Management/Operational Strategy

Columbia will execute its business revitalization plan under new management led by Mr. Strauss Zelnick, the newly appointed Chairman; and Mr. Jack Matsumura, the Company’s recently announced President and CEO.

Mr. Zelnick is the former President and CEO of BMG Entertainment, one of five major global recorded music companies. He is the founder of New York-based ZelnickMedia and during his distinguished 17-year career within the entertainment industry was also President of Twentieth Century Fox.

Mr. Matsumura is the former Representative Director and Senior Executive Vice President of BMG Funhouse, a position he held since 1999, where he oversaw all aspects and complete operations of their domestic and international labels. Prior to joining BMG, Mr. Matsumura held several senior management positions in Marketing, A&R and Promotion at Sony Music Japan and Sony Music USA beginning in 1978.

Columbia has embarked on the new management introducing Executive Officers, which is led by Mr. Matsumura as CEO. Members of the Executive Officers are in the attached.

The Columbia revitalization plan will include the following areas:

- Developing a new strategy to successfully address the high growth J-Pop segment

- Leveraging Columbia’s catalogue to create a strong base of consistent cash flow

- Focusing efforts on hit releases

- Reviewing marketing and sales policies

- Improving project and information management process

- Reevaluating core businesses

- Reviewing policy of human resource management

In addition, Columbia intends to recruit additional senior managers to help orchestrate the revitalization process, and proactively introduce management approach such as stock option plans to properly apply senior management’s incentive structure. Organizational changes along this line have already been made.

Spin-off and Stock Transfer – Birth of “DENON LTD.”

With the completion of the transaction, DENON was separated from Columbia under the newly established split laws in Japan. DENON’s equity was purchased as of October 1 by a new company set up by Ripplewood and Hitachi for six billion yen. The company to succeed the DENON business is named “DENON LTD.” and its head office is located at 16-11, Yushima 3-chome, Bunkyo-ku, Tokyo.

DENON has embarked on a new strategy as a global business as a private company under Ripplewood control. It aims at going public in the future. The annual sales of DENON totaled JPY 57.8 billion in fiscal 2000 and it has 960 employees as of October 1.

Management Structure of “DENON LTD."

With the fresh start, DENON LTD. now has the Fuji Bank as its new main bank. The company also introduced Executive Officers, led by Mitsunari Sakamoto as acting CEO. Members of the Executive Officers are as in the attached.

Capital Increase

Concurrent with the spin-off of DENON, Columbia issued to Ripplewood and Hitachi and Hitachi a new series of convertible preferred stock, raising a total of six billion yen. In the Ripplewood investment, ten million yen were invested by co-investors, Mitsubishi Corporation and Daiichi Kosho Co., Ltd. Columbia had also issued to Hitachi common stock of approximately four billion yen.

After the transactions described above, Columbia’s two largest shareholders are Ripplewood and Hitachi with ownership stakes of approximately 41.6% and 25.7%, respectively.

Financial Flexibility

Columbia intends to use the approximately 16 billion yen to reduce outstanding indebtedness; invest in working capital and for general corporate purposes. The company is committed to strengthen its balance sheet and to further improve capital efficiency through a bold business revitalization effort.

Strauss Zelnick, Chairman of Columbia, commented. “We believe that Columbia will benefit significantly from the financial restructuring just completed, in addition, refocusing the Company on the core Music Artist and Repertoire business will have long term positive effects. We are especially pleased with the addition of Jack Matsumura as the new CEO of Columbia, as he represents the type of creative talent which will be critical to revitalize the Company".

“Ripplewood believes that Columbia has enormous future potential. We are pleased that the transaction has closed and is now ready to move into the execution phase of the revitalization strategy, which should benefit Columbia’s employees, customers, suppliers and investors”, said Timothy C. Collins, CEO of Ripplewood.

For inquiries, contact:

Mr. Kuroda--Nippon Columbia

Tel: 03-3584-8297

Mr. Sugimoto--Ripplewood Japan

Tel: 03-5251-6580

About Ripplewood Holdings L.L.C.

Ripplewood Holdings L.L.C. is a New York-based private equity company operating in Japan through RHJ Industrial Partners L.P. Ripplewood manages over $3 billion of equity capital and has offices in New York and Tokyo with over 40 professionals.

About Nippon Columbia Co., Ltd.

Nippon Columbia Co., Ltd. is a Tokyo Stock Exchange listed company with two leading brands in the audio-visual market. DENON is the name of the company’s high-fidelity line of audio equipment. The record label business operates under the name Nippon Columbia and has a history going back to 1910. Nippon Columbia employs nearly 1,454 individuals worldwide.