|Merger of DDI, KDD and IDO|
|DDI CORPORATION (President: Yusai Okuyama; principal office: Tokyo), KDD Corporation (President: Tadashi Nishimoto; principal office: Tokyo) and IDO CORPORATION (President: Satoshi Nakagawa; principal office: Tokyo) hereby announce they have agreed on the basic details (see attached) for signing an agreement to merge on October 1,2000.|
December 16, 1999
Company: DDI CORPORATION Representative: Yusai Okuyama
Chairman & President
Code: 9433 (TSE 1st Section) Company: KDD Corporation Representative: Tadashi Nishimoto
Code: 9431 (TSE, OSE and NSE 1st Sections) Company: IDO CORPORATION Representative: Satoshi Nakagawa
Code: Not listed DDI CORPORATION(DDI), KDD Corporation(KDD) and IDO CORPORATION(IDO) hereby announce they have agreed as follows on the basic details for signing an agreement to merge on October 1, 2000.
1. Purpose of merger
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:
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.
2. Outline of merger
(1) Planned merger timetable
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: Late June 2000 Date of merger: October 1, 2000 Registration of merger: Early October 2000
(2) Surviving company
(3) Merger share ratios
(4) Money delivered due to merger
(Par value per share: 5,000 yen)
(Par value per share: 500 yen)
Merger ratio 9.21 1
Note: Par value of shares in each company converted to same value.
(Par value per share: 5,000 yen)
(Par value per share: 50,000 yen)
Merger ratio 29 1
- 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.)
3. Outline of parties to the merger
Note: Data correct as of March 31, 1999.
(1) Trade name DDI CORPORATION KDD Corporation IDO CORPORATION (2) Line of
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,
(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
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
March 31 March 31 March 31 (11) Employees 2,990 5,792 979 (12) Main shareholders
Kyocera Corp. 25.16% The Sumitomo Trust
& Banking Co., Ltd.
4.44% IBJ Trust and Banking Co., Ltd.* 4.16% The Chase Manhattan Bank,
Ministry of Posts
Mutual Aid Association
9.26% Toyota Motor Corp. 8.42% Nippon Telegraph
and Telephone Corp.
8.42% Nippon Life Insurance Co. 4.86%
Toyota Motor Corp. 62.84% Tokyo Electric Power
11.78% Chubu Electric Power
7.57% KDD Corp. 2.40%
* IBJ Trust and Banking's stake is the trust property of Sony Corp.
Financial results over past three years
DDI (surviving company) KDD (merged company) IDO (merged company) Accounting period Year ending
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 - - - 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
4. Status after merger
(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)
1) Projected post-merger non-consolidated results obtained by simply adding up figures for each company.
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
2) Projected post-merger non-consolidated results for the year ending March 2001 do not include first-half projections for KDD and IDO.
(10) Post-merger consolidated sales projections (first two years)
3) Post-merger consolidated sales figures obtained by simply combining projections for each company.
Year ending March 2001 Year ending March 2002 Sales 2,690bn yen 3,550bn yen
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.
5. Allocation of new shares to third party
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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