Rakuten, Inc. (hereafter “the Company”) announces that the company has made a resolution at its Board of Directors meeting held today about a company split of its wholly-owned subsidiary Rakuten Edy, Inc. (hereafter “Rakuten Edy”) and merger of Rakuten Edy into the Company, as outlined below. Since these are the company split and merger of a wholly-owned subsidiary, the disclosure of certain items and details has been omitted from this announcement.
１．Purpose of the company split and merger
For expanding payment-related businesses and accelerating development of new business creation by the company and Rakuten Edy, we aim to integrate the intangible assets such as intellectual properties, tangible assets, as well as business development function which Rakuten Edy has to the company. It is expected that this reorganization enables the company to utilize flexibly the Rakuten Edy brand and to improve the efficiency in marketing, thereby aiming to expedite new marketing and service creation by connecting effectively the internet infrastructure and membership of the company with Edy users.
As Rakuten Edy is a pre-paid e-money business for which legal registration is required, in order to maintain independence as an operator from accountability perspective, we have decided to execute a company split in which Rakuten Edy, Inc. is the transferring company and Rakuten Edy Operation, Inc. is the successor company, ahead of the merger of Rakuten, Inc. with Rakuten Edy.
２．Summary of the company split
(1) Outline of the company split
① Schedule
The Board of Directors meeting for the company split July 22, 2016
Execution of company split agreement July 22, 2016
Effective date of the company split October 1, 2016
② Split method
An absorption-type company split in which Rakuten Edy, Inc. is the splitting company and Rakuten Edy Operation, Inc. is the successor company.
③ Details of allotments related to the company split
Based on the conditions of this company split, there will be no related allotment of shares.
④ Deduction of capital
There will be no change in the company’s capital stock.
⑤ Handling of subscription rights to shares and bonds accompanying the company split
Rakuten Edy, Inc. has not issued any subscription rights to shares and any bonds with stock acquisition right.
⑥ Rights and obligation to be succeeded
All assets, liabilities, and attendant rights to succeed the business.
⑦ Prospect of fulfillment of obligations
The company split has no impact on the successor company’s ability to fulfill obligations.
(2) Overview of companies involved in the company split
|
Company name |
Rakuten Edy, Inc. |
Rakuten Edy Operation, Inc. |
|
Head Office |
1-14-1 Tamagawa, |
1-14-1 Tamagawa, |
|
Representative |
Masayuki Hosaka |
Masayuki Hosaka |
|
Main business |
Prepaid e-money services |
Prepaid e-money services |
|
Shareholders’ equity |
1,840 million yen |
75 million yen |
|
Date of establishment |
January 18, 2001 |
May 9, 2016 |
|
Outstanding no. of shares |
100 shares |
1,500 shares |
|
Fiscal year end |
December 31 |
December 31 |
|
Major shareholders and percentage of shares held |
Rakuten, Inc. 100％ |
Rakuten, Inc. 100％ |
Business results
|
|
Rakuten Edy, Inc. |
|
Fiscal year |
Year ended December 31, 2015 |
|
Total equity attributable to owners of the parent company (million yen) |
3,758 |
|
Total assets (million yen) |
44,414 |
|
Total equity attributable to owners of the parent company per share (yen) |
37,585,413.18 |
|
Revenues (million yen) |
6,367 |
|
Operating income (million yen) |
534 |
|
Income before income tax (million yen) |
542 |
|
Net income attributable to owners of the parent company (million yen) |
473 |
|
Net income attributable to owners of the parent company per share (yen) |
4,736,518.63 |
(Note) No business results of Rakuten Edy Operartion, Inc. as it was established in May 2016.
Business name of Rakuten Edy Operation, Inc. will be changed to Rakuten Edy, Inc. after this company split and merger.
(3) Overview of the business unit to be split
① Business to be split
Pre-paid e-money business which splitting company operated
② Business results of division to be split
Sales of year ended December 2015：6,367 million yen
③ Assets and liabilities to be split (As of December 31, 2015)
Assets：42,660 million yen
Liabilities：40,386 million yen
(Note) Items and the book value are estimated as of now and may differ.
(4) Impact on business results
No material impact on Rakuten Group consolidated financial results is anticipated as a result of the completion of the company split.
３. Summary of the merger
(1) Outline of the merger
① Schedule
Merger resolution by the Board of Directors July 22, 2016
Merger contract date July 22, 2016
Effective date of the merger October 1, 2016
(Note） 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.
② Merger method
The Company shall be the surviving company under absorption-type merger, and Rakuten Edy, Inc. shall be dissolved.
③ Merger ratio
Since this will be a merger of a wholly-owned subsidiary, there will be no issuance of new shares, no increase in shareholder’s equity, and no payment for the merger.
④ Handling of share options and bonds with the dissolved company
Rakuten Edy, Inc. has not issued any share options and any bonds with stock acquisition right.
(2) Overview of companies in merger
|
Company name |
Rakuten, Inc. |
Rakuten Edy, Inc. |
|
Head office |
1-14-1 Tamagawa, |
1-14-1 Tamagawa, |
|
Representative |
Hiroshi Mikitani |
Masayuki Hosaka |
|
Main business |
Internet services |
Prepaid e-money services |
|
Shareholders’ equity |
203,587 million yen |
1,840 million yen |
|
Date of establishment |
February 7, 1997 |
January 18, 2001 |
|
Outstanding no. of shares |
1,430,373,900 shares |
100 shares |
|
Fiscal year end |
December 31 |
December 31 |
|
Major shareholders and percentage of shares held
|
Crimson Group, LLC. 15.8% |
Rakuten, Inc. 100％ |
Business results
|
|
Rakuten, Inc. |
|
Fiscal year |
Year ended December 31, 2015 |
|
Total equity attributable to owners of the parent company (million yen) |
662,044 |
|
Total assets (million yen) |
4,269,953 |
|
Total equity attributable to owners of the parent company per share (yen) |
464.80 |
|
Revenues (million yen) |
713,555 |
|
Operating income (million yen) |
94,689 |
|
Income before income tax (million yen) |
91,987 |
|
Net income attributable to owners of the parent company (million yen) |
44,436 |
|
Net income attributable to owners of the parent company per share (yen) |
32.33 |
|
|
Rakuten, Edy, Inc. |
|
Fiscal year |
Year ended December 31, 2015 |
|
Total equity attributable to owners of the parent company (million yen) |
3,758 |
|
Total assets (million yen) |
44,414 |
|
Total equity attributable to owners of the parent company per share (yen) |
37,585,413.18 |
|
Revenues (million yen) |
6,367 |
|
Operating income (million yen) |
534 |
|
Income before income tax (million yen) |
542 |
|
Net income attributable to owners of the parent company (million yen) |
473 |
|
Net income attributable to owners of the parent company per share (yen) |
4,736,518.63 |
(4) Post-merger details
Following this merger, there are no changes to the business name, head office, title and name of representative, main business, shareholders equity and fiscal year end of the Company.
(5) Impact on business results
No material impact on Rakuten Group consolidated financial results since this is a merger of a wholly-owned subsidiary.