September 26, 2017
  • RAKUTEN, INC.

Announcement of Succession of Business by Company Split (Simplified absorption-type split)

 

  Rakuten, Inc. (hereafter “the Company”) announces that the company has made a resolution at its Board of Directors meeting held today about succession of the domestic MVNO business (except for part of the business*1) that Plus One Marketing Co., Ltd (hereafter “POM”) operates. Since this absorption split corresponds to simplified absorption split to which the provision of Article 796, Paragraph 2 of the Companies Act applies, the disclosure of certain items and details has been omitted from this announcement.

 

1.  Purpose of the company split

  Since the start of Rakuten Mobile services as an MVNO in October 2014, Rakuten Group, by utilizing our ecosystem, has expanded the customer base, providing a full line-up of handsets, in addition to providing attractive rate plans and services with a focus on Super-Hodai, aggressive store development, and collaboration with group services such as the point program, Rakuten Ichiba and Rakuten Card.

  POM has expanded into two areas, the FREETEL mobile handset business and an MVNO business. Amongst them, the mobile handset business, whilst being high quality, by offering global standard prices has also expanded into the North America, South America, Asia and Africa markets.

  To realize the expansion of business scale in the domestic MVNO market in the future, the Company decided on a company split of POM for the succession of its MVNO business, including POM users. Following the reorganization, the Company and POM will continue to engage in collaborative efforts to review business synergies between the two companies

*1 Part of the telecommunications business (freetel mobile (FRIMOBA) branded telecommunications business, prepaid SIM business) and some services incidental to the telecommunications business are not included in this succession.

 

2.  Summary of the company split

(1) Outline of the company split

   The Board of Directors meeting for the company split (POM)              September 25, 2017

   The Board of Directors meeting for the company split (the Company) September 26, 2017

   Contract date                                                                                     September 26, 2017

   Effective date of the company split                                    November 1, 2017 (Expected)

(Note)Since this company split corresponds to simplified absorption-type split prescribed in Article 796, Paragraph 2 of the Company Act, shareholders meeting to approve this company split will not be held

(2) Split method

  An absorption-type company split in which POM is the splitting company and the Company is the successor company

(3) Details of allotments related to the company split

  The Company plans to deliver money JPY 520 million to POM as a consideration of the company split

(4) Handling of subscription rights to shares and bonds accompanying the company split

  There is no corresponding matter

(5) Deduction of capital

  There will be no change in the company’s capital stock.

(6) Rights and obligation to be succeeded

  Rights and obligation such as assets, liabilities and contractual positions regarding the company split which is prescribed in absorption-type company split contract will be succeeded.

(7) Prospect of fulfillment of obligations

  The company split has no impact on the successor company’s ability to fulfill obligations.

 

3.Evidence of allotments related to the company split

  Calculation of money to be delivered by the company in this absorption split was decided through consultation and negotiation with POM, which is based on market value equivalent of assets and liabilities to be succeeded.

 

4.  Overview of companies involved in the company split

 

Successor company in absorption-type split

Splitting company in absorption-type split

Company name

Rakuten, Inc.

Plus One Marketing Ltd.

Head office

1-14-1 Tamagawa,
Setagaya-ku, Tokyo

2-8-6 Nishishinbashi,
Minato-ku, Tokyo

Representative

Hiroshi Mikitani

Kaoru Masuda

Main business

Internet Services Company

1)
Manufacture and sales of mobile phone equipment such as smartphones

2)MVNO(Telecommunications carrier by SIM card)

Capital (million yen)

204,562

4,782

Date of establishment

February 7, 1997

October 15, 2012

Outstanding no. of shares

1,432,422,600 shares

315,167 shares

Fiscal year end

December 31

March 31

Major shareholders and percentage of shares held

Crimson Group, LLC  15.8%

Hiroshi Mikitani 12.3%

Kaoru Masuda   
31.7%

Yodobashi Camera Co.,Ltd.   22.3%

 

Business results

 

Rakuten, Inc.
(Consolidated, IFRS)

Fiscal year

Year ended December 31, 2016

Total equity attributable to owners of the parent company (million yen)

680,247

Total assets (million yen)

4,604,672

Total equity attributable to owners of the parent company per share (yen)

476.89

Revenue (million yen)

781,916

Operating Income (million yen)

77,977

Income before income tax (million yen)

73,923

Net income attributable to owners of the parent company (million yen)

37,995

Net income attributable to owners of the parent company per share (yen)

26.65

 

 

Plus One Marketing Ltd.

Fiscal year

Year ended March 31, 2017

Total equity (million yen)

1,427

Total assets (million yen)

6,118

Total equity per share (yen)

4,526.19

Revenue (million yen)

10,059

Operating income (million yen)

(5,388)

Ordinary income (million yen)

(5,526)

Net income (million yen)

(5,530)

Net income per share (yen)

(21,273)

 

5.  Overview of the business unit to be split and succeeded

(1) Business to be split

Domestic MVNO business(Telecommunications carrier by SIM card)

(2) Business results of division to be split

Revenue: JPY 4,329 million

(3) Asset and liabilities to be split

Current assets (million yen)

1,405

Current debt (million yen)

2,977

Fixed assets (million yen)

472

Fixed debt (million yen)

113

Total assets (million yen)

1,877

Total debt (million yen)

3,090

(Note)The above amounts will be confirmed after being calculated based on increases and decreases to be materialized up until the Effective Date.

 

6.  Post-company split details

  Following this company split, 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. Net assets and total assets are not finalized at this time

 

7.  Impact on business results

  No material impact on Rakuten Group consolidated financial results

*Please note that the information contained in press releases is current as of the date of release.

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