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February 14, 2014
  • Rakuten, Inc

Announcement of Merger (Simplified Merger and Short form Merger) of Wholly-Owned Subsidiary Rakuten Travel, Inc.

At a Board of Directors meeting held today, Rakuten, Inc. (hereinafter the ”Company”) resolved to  merge its wholly-owned consolidated subsidiary Rakuten Travel, Inc. into the Company, effective April 1, 2014, as outlined below. Since this merger is a simplified merger of a 100% consolidated subsidiary, the disclosure of certain items and details has been omitted.

 

  1. Purpose of merger

In 2001, the Company established its online travel reservation service “Rakuten Travel”, and has since expanded into various services including reservations for domestic and overseas accommodation, dynamic packages, reservations for overseas flights, highway bus and rent-a-car services.

In 2012, Rakuten Travel, Inc. ranked second amongst travel agencies in Japan for gross transaction value of domestic travel (see note*).

Since Rakuten Travel, Inc. is one of the most important consolidated subsidiaries of the Company, to reinforce the advancement of knowledge and a common platform service and other matters, the Company made a resolution to proceed with the merger, to promote synergies between Rakuten Travel, Inc. and e-Commerce. In addition, the Company aims to strengthen corporate governance and raise the efficiency of systems and human resources. To achieve these aims, and to plan for future growth, Rakuten Travel, Inc. targets an expansion of the convenience of services and to improve the satisfaction of users.

*Source: Japan Tourism Agency “FY2012 Gross Transaction Value Statistics of Travel Agencies”

 

2. Summary of merger

(1)       Schedule

Merger resolution by Board of Directors           February 14, 2014

Merger contract date                                     February 14, 2014

Expected merger date (effective date)           April 1, 2014

Merger registration date (expected)                  April 1, 2014

 

(Note 1)  According to simplified merger rules in Company Law article 796 clause 3, the Company is proceeding with the merger without receiving approval at the Annual General Shareholders Meeting.

(Note 2)  According to short form merger rules in Company Law article 784 clause 1, Rakuten Travel, Inc. is proceeding with the merger without receiving approval at the Annual General Shareholders Meeting.

  (2)  Merger method

The Company shall be the surviving company under absorption-type merger, and Rakuten Travel, Inc. shall be dissolved.

  (3)  Merger ratio

Since this will be a merger of wholly-owned subsidiary, there will be no issuance of new shares and no increase in shareholders’ equity.

  (4) Handling of subscription rights to shares and bonds with the dissolved company

Rakuten Travel, Inc. has not issued subscription rights to shares.

 

  1. Overview of companies in merger

Company name

Rakuten, Inc.

(as of December 31, 2013)

Rakuten Travel, Inc.

(as of March 31, 2013)

Main business

Internet Services

Operation of “Rakuten Travel” Internet travel site

Date of establishment

February 7, 1997

January 4, 2000

Head Office

4-12-3 Higashishinagawa, Shinagawa-ku, Tokyo

4-12-3 Higahshishinagawa, Shinagawa-ku, Tokyo

Representative

Hiroshi Mikitani

Takanobu Yamamoto

Shareholders Equity

109,530 million yen

212 million yen

Outstanding no. of shares

1,323,863,100 shares

69,780 shares

Net Assets

306,454 million yen

(consolidated)

29,381 million yen

(non-consolidated)

Total Assets

3,209,808 million yen

(consolidated)

44,269 million yen

(non-consolidated)

Fiscal Year End

December 31

March 31

Main shareholders

(as of December 31, 2013)

Crimson Group 17.1%

Hiroshi Mikitani 13.3%

Haruko Mikitani 10.0%

Rakuten, Inc. 100%

 

 

 

Business Results

 

Rakuten, Inc.

(Consolidated, IFRS)

Rakuten Travel, Inc.

(Non-consolidated, J-GAAP)

Fiscal Year

Year ended December 31, 2013

Year ended March 31, 2013

Revenues (million yen)

518,568

31,303

Operating income (million yen)

90,244

10,389

Ordinary income (million yen)

10,416

Income before income tax (million yen)

88,610

10,380

Net income (million yen)

42,900

6,424

Earnings per share (yen)

32.60

92,058.48

Dividends per share (yen)

4.00

0.00

Net assets per share (yen)

227.70

421,057.44

 

4. Post-merger details

(1)       Business name                                  Rakuten, Inc.

(2)       Main business                                   Internet Services

(3)       Head office                                       4-12-3 Higashishinagawa, Shinagawa-ku, Tokyo

(4)      Representative                                  Hiroshi Mikitani

(5)    Shareholder equity                      109,530 million yen

(6)       Fiscal year end                                  December 31

(7)       Outstanding number of shares           1,323,863,100 shares (as of December 31, 2013)

(8)    Impact on business results

Since this is a merger of a wholly-owned subsidiary, the impact on Rakuten Group consolidated revenues, operating income, and income before income tax is limited. On the other hand, it is expected that there will be an impact on tax expenses caused by the merger, and this is now under thorough investigation. A positive impact on consolidated net income is expected during FY2014. Once the amount of the impact is finalized, it will be disclosed in a timely and appropriate manner.

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