Eastman Kodak Company has agreed to allow Flextronics International Ltd. to manufacture and distribute Kodak consumer digital cameras and manage certain camera design and development functions.

Under the agreement, Kodak (Rochester, N.Y.) will divest its entire digital camera manufacturing requirements to Flextronics, including assembly, production, and testing. Flextronics (Singapore) will also manage the operations and logistics services for Kodak's digital still cameras. Kodak will continue to develop the high-level system design, product look and feel and user experience, and conduct advanced research and development for its digital still cameras.

Kodak will retain all intellectual property and patents as part of the transaction as well as Kodak trademarks, trade names, customers, customer information and customer relationships, feature specifications, digital camera designs and digital camera technologies.

Upon closing of the transaction, Flextronics will acquire a significant portion of the Kodak Digital Product Center, Japan Ltd. in Chino and Yokohama, Japan, and associated camera design functions and its employees and the digital camera manufacturing, assembly and warehousing requirements and related employees of Kodak Electronics Products, Shanghai Co. Ltd. in China.

"This is another move in Kodak's overall strategy to further drive improvements for profitability and efficiency in the operating model of our consumer digital business," said John Blake, Jr., general manager, Digital Capture & Devices, Consumer Digital Imaging Group and vice president, Eastman Kodak Company. "By partnering with Flextronics, Kodak will streamline our digital camera operations. This agreement will bring our camera products to market more quickly, with greater predictability, flexibility, and cost efficiency while maintaining the innovative ease-of-use for which the Kodak brand is renowned."

Under the agreement, 550 Kodak personnel will be transferred to Flextronics facilities.

The transaction to close in the third quarter.

By: DocMemory
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