- Deal Will Expand Company's Industrial Applications Business

SHENZHEN, China, April 14 /PRNewswire-FirstCall/ -- Cogo Group, Inc. (Nasdaq: COGO) a China-based provider of customized module design solutions, engineering and technology services to domestic and international companies, today announced it has entered a Share Purchase Agreement to acquire Mega Smart Group Limited ('Mega Smart'), a pioneer in China's developing industrial applications market.

Mega Smart is a strategic acquisition aimed at supporting Cogo's developing industrial applications business. The acquired team includes 20 key sales and engineering specialists dedicated to developing customized modules for these verticals. Mega Smart has recently been focused on providing solutions to the ongoing modernization and build-out of China's electric grid and 'smart meter' segments. It is currently pursuing opportunities with leading suppliers and customers including renowned enterprises affiliated with China's largest power suppliers.

Once completed, this acquisition will significantly enhance Cogo's product offerings and fuel the Company's growth in the rapidly expanding industrial sector in China, which is currently benefitting from a large, broad-based government infrastructure stimulus plan. Cogo's management expects a smooth integration of Mega Smart's sales team, allowing the combined force to rapidly leverage the company's current customer base of over 1,200.

Cogo believes that Mega Smart is particularly well-positioned to benefit from two distinct parts of the planned modernization of China's electrical system. First, China's largest power suppliers, the State Grid Corporation of China ('SGCC') and China Southern Power Grid, are planning to invest more than $180 billion in grid construction and other key projects in 2009 and 2010. Second, China is beginning an aggressive upgrade of the country's electricity meters. The adoption of 'smart meters' will encourage energy efficiency and flexibility for consumers and businesses and is expected to allow better power production planning.