[ Attachment ]
Details of Merger
1.Purpose of merger |
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With the Japanese telecommunications market growing increasingly competitive and globalized as a result of deregulation and technological developments, DDI, KDD and IDO have been vigorously negotiating to build a secure position for themselves as a core telecommunications provider, and as a result have reached agreement as equals on the following basic points:
- Becoming a comprehensive telecommunications carrier capable of offering seamless mobile, domestic and international telecom services will realize synergies enabling DDI, KDD and IDO to provide services more effectively and efficiently and thereby compete more effectively against the NTT group.
- By enhancing their capital base, DDI, KDD and IDO will be able to accelerate moves to expand the scope of their businesses.
- Through improving operating efficiency and competitiveness and expanding their scope of business, DDI, KDD and IDO will be able to offer world-beating services and aggressively expand marketing operations to capture the support of a wide customer base ranging from individuals to mega-companies both in Japan and abroad.
- By concentrating management resources on one merged company and harmonizing the business objectives of personnel at all three firms in line with a unified business strategy, DDI, KDD and IDO aim to become a powerful business entity with the strength to compete against the dominant carriers in Japan and overseas.
In addition to becoming increasingly cutthroat, the market is also seeing a rapid shift from voice to data communications, and from fixed to mobile communications. Being able to offer seamless service by developing both mobile and IP networks has thus grown to be of vital importance. Merging will enable DDI, KDD and IDO to respond to this changing environment, allowing them to pool their accumulated know-how, develop and expand an integrated backbone and provide a seamless nationwide mobile phone service, and become a leading player in developing next-generation mobile communications services.
Focusing as it will on mobile and IP network services and making more effective use of management resources, the global comprehensive telecommunications provider that the merger will create will greatly benefit the Japanese public and make a genuine contribution to the development of the economy as a whole.
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2.Outline of merger |
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(1) Planned merger timetable |
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Signing of merger memorandum: |
| December 16, 1999 |
Board meeting to approve merger agreement: |
| Late March 2000 |
Signing of merger agreement: |
| April 1, 2000 |
General meeting of shareholders to approve merger agreement:
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| Late June 2000 |
Date of merger: |
| October 1, 2000 |
Registration of merger: |
| Early October 2000 |
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(2) Surviving company |
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DDI CORPORATION
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(3) Merger share ratios |
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Company | DDI (Par value per share: 5,000 yen) | KDD (Par value per share: 500 yen) |
Merger ratio | 9.21 | 1 |
Company | DDI (Par value per share: 5,000 yen) | IDO (Par value per share: 50,000 yen) |
Merger ratio | 29 | 1 |
Note: Par value of shares in each company converted to same value.
- Proportional allocation of shares
One share in DDI (par value per share: 5,000 yen) will be issued per [92.1] shares in KDD (par value per share: 500 yen). One share in DDI (par value per share: 5,000 yen) will be issued per 2.9 shares in IDO (par value per share: 50,000 yen).
- Reasons for merger ratios
The merger ratio for DDI and KDD was calculated based on the average closing price on the TSE over the six months up to December 15, 1999 of shares issued by each company. The ratio in the case of IDO was determined based on the results of calculations by a third-party agency, and finalized by agreement among the parties to the merger.
- Number of new shares issued through merger
Par value ordinary shares: 1,345,260.60 (par value per share: 5,000 yen)
(Calculated on the basis of the capital stock of KDD and IDO as of December 15, 1999.)
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(4) Money delivered due to merger |
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Pending
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3. Outline of parties to the merger |
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(1) |
Trade name |
DDI CORPORATION |
KDD Corporation |
IDO CORPORATION |
(2) |
Line of business |
Type I carrier |
Type I carrier |
Type I carrier |
(3) |
Incorporation |
June 1, 1984 |
March 24, 1953 |
March 9, 1987 |
(4) |
Principal office |
8, Ichiban-cho, Chiyoda-ku, Tokyo |
2-3-2, Nishi-shinjuku, Shinjuku-ku, Tokyo |
6, Rokuban-cho, Chiyoda-ku, Tokyo |
(5) |
Representative |
Yusai Okuyama |
Tadashi Nishimoto |
Satoshi Nakagawa |
(6) |
Capital |
72,634 million yen |
40,502 million yen |
68,740 million yen |
(7) |
Capital stock (par value) |
2,274,442 shares (5,000 yen) |
76,224,823 shares (500 yen) |
1,374,804 shares (50,000 yen) |
(8) |
Shareholders' equity |
318,281 million yen |
371,258 million yen |
19,865 million yen |
(9) |
Total assets |
810,895 million yen |
924,733 million yen |
457,995 million yen |
(10) |
Accounting period |
March 31 |
March 31 |
March 31 |
(11) |
Employees |
2,990 |
5,792 |
979 |
(12) |
Main shareholders and shareholdings |
Kyocera Corp. | 25.16% |
The Sumitomo Trust & Banking Co., Ltd. | 4.44% |
IBJ Trust and Banking Co., Ltd.* | 4.16% |
The Chase Manhattan Bank, N.A., London | 3.33% |
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Ministry of Posts &Telecommunications Mutual Aid Association | 9.26% |
Toyota Motor Corp. | 8.42% |
Nippon Telegraph and Telephone Corp. | 8.42% |
Nippon Life Insurance Co. | 4.86% |
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Toyota Motor Corp. | 62.84% |
Tokyo Electric Power Co., Ltd. | 11.78% |
Chubu Electric Power Co., Ltd. | 7.57% |
KDD Corp. | 2.40% |
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Note: Data correct as of March 31, 1999.
* IBJ Trust and Banking's stake is the trust property of Sony Corp.
Financial results over past three years
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DDI (surviving company) |
KDD (merged company) |
IDO (merged company) |
Accounting period |
Year ending Mar. 1997 |
Year ending Mar. 1998 |
Year ending Mar. 1999 |
Year ending Mar. 1997 |
Year ending Mar. 1998 |
Year ending Mar. 1999 |
Year ending Mar. 1997 |
Year ending Mar. 1998 |
Year ending Mar. 1999 |
Sales (mil. yen) |
557,839 |
535,882 |
605,510 |
322,458 |
316,413 |
313,160 |
267,440 |
338,825 |
410,710 |
Ordinary profit (mil. yen) |
67,756 |
39,503 |
33,648 |
20,807 |
16,761 |
9,425 |
-5,889 |
-38,553 |
26,938 |
Net income (mil. yen) |
37,783 |
23,740 |
16,867 |
10,165 |
8,451 |
7,269 |
-5,919 |
-38,583 |
7,509 |
Net income per share (yen) |
17,376.07 |
10,876.41 |
7,416.01 |
158.16 |
131.50 |
106.50 |
-12,918.15 |
-81,949.68 |
5,461.93 |
Dividend per share (yen) |
1,790.00 |
1,790.00 |
1,790.00 |
50.00 |
50.00 |
50.00 |
- |
- |
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Shareholders' equity per share (yen) |
113,939.39 |
134,341.24 |
139,938.22 |
5,493.98 |
5,573.70 |
4,870.57 |
11,158.14 |
8,987.77 |
14,449.70 |
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4. Status after merger |
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(1) | Trade name: | DDI CORPORATION |
(2) | Logomark: | KDDI |
(3) | Line of business: | Type I carrier |
(4) | Principal office: | 8 Ichiban-cho, Chiyoda-ku, Tokyo |
(5) | Representative: | Yusai Okuyama (President) |
(6) | Capital: | Pending |
(7) | Total assets | 2.1936 trillion yen (combined total assets of each company as of March 31, 1999) |
(8) | Accounting period | March 31 |
(9) | Projected non-consolidated business results after merger (first two years)
| Year ending March 2001 | Year ending March 2002 |
Sales | 1,160bn yen | 1,750bn yen |
Operating profit | 50bn yen | 100bn yen |
Ordinary profit | 40bn yen | 90bn yen |
Net income | 30bn yen | 60bn yen |
1) Projected post-merger non-consolidated results obtained by simply adding up figures for each company.
2) Projected post-merger non-consolidated results for the year ending March 2001 do not include first-half projections for KDD and IDO. |
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(10) | Post-merger consolidated sales projections (first two years)
| Year ending March 2001 | Year ending March 2002 |
Sales | 2,690bn yen | 3,550bn yen |
3) Post-merger consolidated sales figures obtained by simply combining projections for each company.
4) Post-merger consolidated sales projections for the year ending March 2001 do not include first-half sales KDD and IDO. Their inclusion would increase sales to 3,260bn yen. |
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5. Allocation of new shares to third party |
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DDI shall allocate to and Toyota Motor Corp. shall receive new shares prior to the merger. Specific details of the third-party share allocation shall be determined at a later date by separate agreement. |
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