| Please be informed that some details were omitted from this announcement because the Company Split will simply involve the transfer of LAWSON's business operations to the wholly owned subsidiary, LAWSON Okinawa. I. Absorption-Type Company Split by LAWSON
1. Purpose of the Company Split
LAWSON has 1 Company-operated convenience store and 133 franchised convenience stores in the Okinawa Prefecture. Convenience store operations in this prefecture must be developed more closely with this region compared to other parts of Japan because of the marked differences in eating habits, various events, climate and other aspects. In order to further develop the LAWSON chain in the Okinawa Prefecture by developing convenience store operations more in step with the region, LAWSON plans to transfer the Okinawa CVS Operations to LAWSON Okinawa, which will be established to operate convenience stores in the prefecture. Together with this move, by jointly operating LAWSON Okinawa with SAN-A, which is engaged in retailing operations centered on Okinawa, LAWSON will be better able to develop products that match the preferences of Okinawan consumers as well as conduct sales promotions suited to the various events in the region. Through this and other ways, LAWSON will strive to create stores that better cater to regional needs. 2. Outline of the Company Split
(1) Company Split Schedule
| Board of Directors' meeting approving the company split | 28-Sep-09 | | Date of execution of the company split agreement | October 9, 2009 (Planned) | | Planned company split date (Effective date) | December 1, 2009 (Planned) | *Because this is a simple company split for LAWSON as provided for in Article 784, Paragraph 3 of the Company Act of Japan and a summary-method company split for LAWSON Okinawa as provided for in Article 796, Paragraph 1 of the same Act, neither company will convene a general meeting of the shareholders to obtain shareholders' approval of the Company Split.(2) Company Split Method
An absorption-type split in which LAWSON shall be the splitting company and LAWSON Okinawa shall be the succeeding company. (3) Details of Any Allotment for the Company Split
No share will be allotted or any other consideration given when the Company Split takes place because the transaction will be carried out between the parent company and its wholly owned subsidiary. (4) Decrease in Capital, etc., Due to the Company Split
There will be no decrease in capital, etc. at LAWSON due to the Company Split. (5) Treatment of Share Options and Bonds with Share Options of the Splitting Company
There will be no change in the treatment of share options at LAWSON due to the Company Split. Please be advised that no bonds with share options are issued. (6) Rights and Obligations to be Succeeded by the Succeeding Company
In accordance with the provisions of the company split agreement, on the effective date of the Company Split, LAWSON Okinawa shall succeed to the assets, obligations, franchise agreements, lease agreements and other rights and obligations of LAWSON's Okinawa CVS Operations. However, employees principally attached to the Okinawa CVS Operations will continue to be employed by LAWSON and will be borrowed by LAWSON Okinawa. As regards succession to the obligations, it will be carried out by an assumption of obligations without exempting LAWSON therefrom. (7) Outlook for Fulfillment of Obligations
The Board of Directors of LAWSON has concluded that there will be no problems regarding the certainty of fulfilling the obligations to be borne by LAWSON and LAWSON Okinawa after the Company Split. 3. Summary of the Companies Involved in the Company Split
| (1) | Company Name | LAWSON, INC.
(Splitting Company)
As of February 28, 2009 | LAWSON Okinawa, Inc.
(Succeeding Company)
As of Establishment | | (2) | Location of the Head Office | 11-2, Osaki 1-chome, Shinagawa-ku, Tokyo | 1-5, Uchima 4-chome, Urasoe City, Okinawa Prefecture | | (3) | Representative | Takeshi Niinami, President and CEO | Shinichi Tanaka, President and Representative Director | | (4) | Description of the Businesses | Operation of the franchised chain of LAWSON convenience stores | Convenience store operations in the Okinawa Prefecture | | (5) | Capital | 58,506 million yen | 10 million yen | | (6) | Date Established | 15-Apr-75 | October 9, 2009 (Planned) | | (7) | No. of Outstanding Shares | 99,600,000 shares | 200 shares | | (8) | Fiscal Year-end | End of February | End of February | | (9) | Net Assets | 203,178 million yen (Consolidated) | 10 million yen (Non-Consolidated) | | (10) | Total Assets | 436,171 million yen (Consolidated) | 10 million yen (Non-Consolidated) | | (11) | Major Shareholders and Shareholding Ratio | Mitsubishi Corporation 32.36%
Japan Trustee Services Bank, Ltd. (Trust Account) 6.67%
The Master Trust Bank of Japan, Ltd. (Trust Account) 6.08%
Japan Trustee Services Bank, Ltd. (Trust Account 4G) 5.08%
Marubeni Foods Investment Co., Ltd. 4.83% | LAWSON, INC. 100.00% |
| (12) Results for the Three Most Recent Fiscal Years | LAWSON (Consolidated) | | Fiscal Year-end | 28-Feb-07 | 29-Feb-08 | 28-Feb-09 | | Consolidated Net Assets per Share (Yen) | 1,868.91 | 1,867.84 | 1,983.36 | | Consolidated Total Operating Revenues | 283,053 | 301,176 | 349,476 | | Consolidated Operating Profit | 44,513 | 46,610 | 49,186 | | Consolidated Recurring Profit | 44,646 | 46,244 | 48,787 | | Consolidated Net Profit of the Current Fiscal Year | 20,983 | 22,119 | 25,306 | | Consolidated Net Profit of the Current Fiscal Year per Share (Yen) | 201.5 | 214.69 | 255.22 | | Cash Dividends per Share | 100 | 110 | 160 | (Unit: Million yen, unless noted otherwise) (Note: LAWSON Okinawa is not shown above because the first fiscal year after its establishment is yet to take place.)4. Summary of the Business Division to be Split Off
(1) Outline of the Business of the Business Division to be Split Off
Convenience store operations in the Okinawa Prefecture (2) Operating Results in FY Ending February 28, 2008 of the Business Division to be Split Off
| | Okinawa CVS Operations (a) | LAWSON (Consolidated) (b) | Ratio (a/b) | | Total Net Sales | 21,909 million yen | 1,558,781 million yen | 1.40% | (3) Items and Amounts of Assets and Liabilities to be Split Off (As of February 28, 2009)
| Assets | Liabilities | | Item | Carrying Amount | Item | Carrying Amount | | Current Assets | 259 million yen | Current Liabilities | 13 million yen | | Fixed Assets | 2,929 million yen | Fixed Liabilities | 475 million yen | | Total | 3,189 million yen | Total | 489 million yen | 5. Status of the Succeeding Company in an Absorption-Type Company Split
| (1) | Company Name | LAWSON Okinawa, Inc. | | (2) | Location of the Head Office | 1-5, Uchima 4-chome, Urasoe City, Okinawa Prefecture | | (3) | Representative | Shinichi Tanaka, President and Representative Director | | (4) | Description of the Businesses | Convenience store operations in the Okinawa Prefecture | | (5) | Capital | 10 million yen | | (6) | Fiscal Year-end | End of February | | (7) | Net Assets | 10 million yen | | (8) | Total Assets | 10 million yen | 6. Listed Company Status After the Company Split
| (1) | Company | LAWSON, INC. | | (2) | Location of the Head Office | 11-2, Osaki 1-chome, Shinagawa-ku, Tokyo | | (3) | Representative | Takeshi Niinami, President and CEO | | (4) | Description of the Businesses | Operation of the franchised chain of LAWSON convenience stores | | (5) | Capital | 58,506 million yen | | (6) | Fiscal Year-end | End of February | | (7) | Net Assets | 203,178 million yen | | (8) | Total Assets | 436,171 million yen | II. Execution of the Joint Venture Agreement Between LAWSON and SAN-A
1. Reason for the Execution of the Joint Venture Agreement
SAN-A is engaged in retailing operations centered on Okinawa, while LAWSON runs a nationwide chain of convenience stores. By jointly operating LAWSON Okinawa, SAN-A will be able to firmly establish a comprehensive retailing business that can cater to all the customer needs in the Okinawa Prefecture. As for LAWSON, it believes that it can develop CVS Operations that are more closely tied to Okinawa by drawing on SAN-A's proprietary retailing expertise in the prefecture, raw material supply capabilities, store development information and other strengths. This should enable LAWSON to further expand and develop the LAWSON chain in Okinawa Prefecture. Based on such premise, LAWSON decided to transfer the shares of LAWSON Okinawa (51 % of the total outstanding shares) to SAN-A after the Company Split, and both LAWSON and SAN-A will jointly manage LAWSON Okinawa. 2. Details of the Joint Venture Agreement
LAWSON will transfer the shares of LAWSON Okinawa (51% of the total outstanding shares) to SAN-A, making LAWSON Okinawa a joint venture company after the Company Split. Thereafter, LAWSON Okinawa will have directors of both companies on its board of directors and borrow employees and other personnel from the said companies. LAWSON and SAN-A will jointly manage LAWSON Okinawa. (1) The Time of the Transfer of LAWSON Okinawa Shares to SAN-A
December 1, 2009 (Planned) (2) Shareholding Ratio in the Joint Venture Company (LAWSON Okinawa After the Transfer of Shares)
SAN-A 51%, LAWSON 49% (3) Value of the Transfer of LAWSON Okinawa Shares
3,060 million yen (30 million yen per share) (4) Summary of the Joint Venture Company After the Transfer of Shares
| (1) | Company Name | LAWSON Okinawa, Inc. | | (2) | Location of the Head Office | 1-5, Uchima 4-chome, Urasoe City, Okinawa Prefecture | | (3) | Representative | Masayuki Koja, President and Representative Director | | (4) | Description of the Businesses | Convenience store operations in the Okinawa Prefecture | | (5) | Capital | 10 million yen | | (6) | Established | October 9, 2009 (Planned) | | (7) | Fiscal Year-end | End of February | | (8) | Shareholding Ratio | SAN-A 51%, LAWSON 49% |
3. Summary of SAN-A
| (1) | Company Name | SAN-A CO., LTD. | | (2) | Description of the Businesses | Operation of supermarkets as well as restaurants, hotels, etc. | | (3) | Location of the Head Office | 7-2-10, Oyama, Ginowan-shi, Okinawa | | (4) | Representative | Tessei Uechi, President and CEO | | (5) | Capital | 3,723 million yen | | (6) | Fiscal Year-end | End of February |
III. Impact on Business Results
These developments are expected to have only a negligible impact on the consolidated and non-consolidated business results of SAN-A and LAWSON for their current fiscal year ending February 28, 2010. Please be advised that SAN-A is still reviewing the statements consolidated with LAWSON Okinawa. We will inform you of the results of the review once they have been determined. |
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