Varian Medical Systems, Mitsubishi Electric Corp. in Japanese Joint Venture Dec 19, 2003

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Varian Medical Systems announced that it has signed an agreement with Mitsubishi Electric Corp. that will provide radiotherapy equipment and service in Japan and other Asian countries.

In accordance with a letter of intent, Mitsubishi Electric Corp.'s radiotherapy service business 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 2-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 3-year arrangement. The joint venture is expected to contribute U.S. $10 million to $12 million in additional annual service revenue to Varian Medical Systems. 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.

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