Under the terms of the transaction Johnson Matthey will be acquiring land, buildings, plant and machinery and inventory, together with a highly skilled workforce of some 350 people. This includes much of the equipment that Johnson Matthey will require for the manufacture of plastic laminate packages for semiconductors. The Cray facility is one of the most advanced in the USA with the capability of producing some of the most sophisticated PCBs in the world. It is located in Chippewa Falls Wisconsin, some 90 miles from Minneapolis.

The proposed purchase stems directly from Johnson Matthey's US$170 million acquisition in September 1995 of Advanced Circuits, Inc (ACI) - a market leader in both high technology printed circuit boards and the emerging field of plastic laminate packaging for semiconductors. Key customer requirements for plastic laminate packaging, which is now replacing ceramic packaging, for semiconductors are accelerating. The purchase of the Cray facility will enable volume production levels to be reached much more quickly than by establishing new facilities from scratch.

Johnson Matthey will continue to supply high technology PCBs to Cray. This will give Johnson Matthey an immediate revenue stream as it ramps up production to meet the requirements of its key customers for plastic laminate packaging.

The transaction is subject to contract and normal regulatory approvals.

Commenting on the acquisition, David Davies, Chairman and Chief Executive of Johnson Matthey, said:

"The acquisition of the Cray facilities brings Johnson Matthey two benefits. First, it allows us to accelerate the pace at which we can reach full scale production of plastic laminate packages as required by our most important customers. Secondly, it extends our position in the manufacture of multi layer PCBs.

The transaction stems directly from the acquisition of ACI in September 1995 and further underlines our strategic commitment to the substantial and growing electronic materials market."