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April 24, 2003

Announcement of Merger of Subsidiary

Sony Corporation ("Sony") has decided to absorb its wholly-owned subsidiary SMEJ Inc. by a merger and today signed the merger agreement.

1-a. Background

Sony Music Entertainment (Japan) Inc. divided its group businesses into music related and non-music related and established two subsidiary companies to oversee the two domains as of April 1, 2003. The purpose of this was to quickly respond to the transformation of the music industry as well as to further strengthen and expand both of its business domains. Sony Music Entertainment Inc.(Japan) changed its company name to SMEJ Inc. also effective April 1, 2003. The name, Sony Music Entertainment (Japan) Inc., has been adopted as the company name for the music related subsidiary company.

1-b. Purpose of Merger

Upon completion of the absorption, the shareholdings of SMEJ Inc.'s current two subsidiary companies and SMEJ Inc.'s shareholdings of other Sony Group sister companies will be consolidated into Sony Corporation. In this manner, Sony will strive to further link and strengthen these businesses within the total Sony Group.

2. Conditions of the merger, etc.

Schedule of the merger^*
April 22, 2003 (Tuesday) Board meeting to approve merger agreement
April 23, 2003 (Wednesday) Conclusion of merger agreement
May 12, 2003 (Monday) Shareholders meeting to approve merger agreement (SMEJ)
July1, 2003 (Tuesday) Effective date of merger
July1, 2003 (Tuesday) Official registration of merger
Method of the merger
Sony, as an ongoing concern, shall absorb SMEJ, which shall be subsequently dissolved.
Others
Due to the fact that SMEJ is a wholly-owned subsidiary of Sony, there shall be no issuance of new shares or cash payment upon this merger.

*Pursuant to the provisions of Clause 3 of Article 413 of the Commercial Code of Japan, Sony shall perform the merger with SMEJ without the approval of the merger agreement by its shareholders.

3. Summary of Parties

(1) Trade name	Sony Corporation	SMEJ Inc.
(2) Field of business	Manufacture and sale of electronic and electrical machines and equipment	Investment in company planning, producing, manufacturing and selling music and visual software
(3) Date of incorporation	May 7, 1946	March 1, 1968
(4) Location of head office	7-35, Kitashinagawa 6-chome, Shinagawa-ku, Tokyo	4-5, Rokubancho Chiyoda-ku, Tokyo
(5) Representative	Nobuyuki Idei, Representative Director	Eiji Kishi, Representative Director
(6) Share capital	¥476,224 million	¥49,660 million
(7) Total number of shares issued and outstanding	922,918,991 shares	108,179,321 shares
(8) Shareholders' equity	¥1,886,389 million	¥157,076 million
(9) Total assets	¥3,615,038 million	¥216,060 million
(10) Date of settlement	March 31	March 31
(11) Number of employees	16,836	0
(12) Major customers	Affiliated manufacturing and sales companies in and outside Japan	Sony Corporation
(13) Major shareholders and shareholding ratios	1 Moxley & Co. 6.1% 2 Japan Trustee Services Bank,Ltd. (Trust Account) 4.4% 3 The Master Trust Bank of Japan, Ltd. (Trust Account) 3.3% 4 The Chase Manhattan Bank,N. A. London 2.9% 5 State Street Bank and TrustCompany 2.8%	Sony Corporation 100%
(14) Main banks	Sumitomo Mitsui Banking Corporation The Bank of Tokyo-Mitsubishi, Ltd.and others	Sumitomo Mitsui Banking Corporation

(Note)The above data for Sony are as of September 30, 2002. The above data for SMEJ are as of March 31, 2003 except for the number of employees, which is as of April 1, 2003.

(15) Business result for the most recent three years (unit: millions of yen)

	Sony Corporation			SMEJ Inc.
Fiscal year ended on	2000/3/31	2001/3/31	2002/3/31	2000/3/31	2001/3/31	2002/3/31
Net sales	2,592,962	3,007,584	2,644,195	118,215	102,887	75,601
Operating income	(2,755)	50,458	(52,994)	4,950	10,637	1,691
Ordinary income	30,237	81,502	(6,122)	8,094	12,708	4,327
Net income	30,838	45,002	29,635	6,361	1,503	377
Net income per share (yen)	73.09	49.18	32.22	58.80	13.90	3.49
Dividends per share (yen)	50.00	25.00	25.00	35.00	0	338.18
Shareholders' equity per share (yen)	3,956.68	2,021.33	2,024.10	2,071.52	2,069.85	1,795.43

(Note)Sony split its shares at the ratio of 2 shares for each share as of May 19, 2000.

4. Circumstances after the merger

(1) Trade name
Sony Corporation
(2) Field of business
Manufacture and sale of electric and electrical machines and equipment
(3) Location of head office
7-35, Kitashinagawa 6-chome, Shinagawa-ku, Tokyo
(4) Representative
Nobuyuki Idei, Representative Director
(5) Share capital
Upon this merger the amount of share capital shall not change.
(6) Total assets
This merger will not have a material impact on total assets.
(7) Date of settlement
March 31
(8) Effect on business results
This merger will not have a material impact on Sony's consolidated results.