Matsushita to Absorb Wholly-Owned Subsidiary

Business Wire, July 25, 2007

OSAKA, Japan -- Matsushita Electric Industrial Co., Ltd. (MEI [NYSE symbol: MC]), best known for its Panasonic brand, today announced that the Company will absorb Matsushita Technoresearch, Inc., a wholly-owned subsidiary of MEI.

The merger is expected to take effect on October 1, 2007, at which point Matsushita Technoresearch, Inc. will be merged into MEI.

Details of the merger are outlined below.

1. Purpose of merger

Matsushita Technoresearch, Inc. implements the analysis, physical assessment, and funded research and sales of research results on industrial materials and natural chemical substances.

Through this merger, MEI will strengthen its research & development structure for its strategic devices including display devices from the aspect of materials and processes, thereby accelerating its speed of R&D.

2. Details of merger

(1) Merger schedule

July 25, 2007                Board of Directors meet to vote on merger
July 25, 2007                Signing of merger agreement
October 1, 2007 (planned)    Effective date of merger

(Note: The merger will be conducted through the simplified procedures provided under the Company Law of Japan, by which resolutions of the shareholders' meeting of MEI and Matsushita Technoresearch, Inc. will not be made.)

(2) Method of merger

MEI, as the continuing company, will absorb Matsushita Technoresearch, Inc., which will be subsequently dissolved.

(3) Treatment of stock acquisition rights and convertible bonds of the expiring company

There are no stock acquisition rights or convertible bonds issued by Matsushita Technoresearch, Inc.

3. Basic information of MEI and Matsushita Technoresearch, Inc.

[TABLE OMITTED]

Note: Amounts less than one million yen have been rounded to the nearest whole million yen amount.

4. Effects of merger on MEI's financial results

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Disclaimer Regarding Forward-Looking Statements

This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Matsushita and its Group companies (the Matsushita Group). To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Matsushita Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Matsushita Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Matsushita undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Matsushita in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.

The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Matsushita Group operates businesses, or in which assets and liabilities of the Matsushita Group are denominated; the ability of the Matsushita Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the ability of the Matsushita Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Matsushita Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Matsushita Group; the possibility that the Matsushita Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Matsushita Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, and deferred tax assets; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes and other events that may negatively impact business activities of the Matsushita Group. The factors listed above are not all-inclusive and further information is contained in Matsushita's latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.