Hardware/software integration to strengthen positions in music creation and sound equipment markets.

YAMAHA CORPORATION announced that it has reached a basic agreement to acquire 100% of the common stock of Steinberg Media Technologies GmbH, a division of Pinnacle Systems, Inc., a California-based maker and seller of video editing systems. The acquisition, which includes Steinberg’s US sales operations, took place through closed competitive bidding on December 20, 2004, US local time.

Founded in 1984, Steinberg Media Technologies is the market share leader in computer software used to produce music. Steinberg became part of the Pinnacle Systems Group in January 2003.

In the mid 1990s, YAMAHA forged a relationship with Steinberg by using its computer music products and bundled software. In April 2004, YAMAHA and Steinberg deepened their cooperative relationship with the Studio Connections initiative, a joint-development project to seamlessly integrate YAMAHA’s hardware products with Steinberg’s software.

Now, YAMAHA has reached agreement to acquire all of Steinberg’s common stock through closed competitive bidding. Eying growth in the music creation market and expanded sales of sound equipment, YAMAHA has incorporated Steinberg’s assets, including its strong technical capabilities in software development and intellectual property, into its Group efforts and further strengthened these activities through joint-development projects. Having determined that Steinberg’s competitive capabilities will be very formidable going forward, YAMAHA decided to acquire all of that company’s common stock through participation in closed competitive bidding.