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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Z Holdings Corporation    4689   JP3933800009

Z HOLDINGS CORPORATION

(4689)
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Z : Notice Concerning Conclusion of Business Alliance MOU by Z Holdings Corporation, LINE Corporation, SoftBank Corp. and NAVER Corporation

08/03/2020 | 03:33am EST

[Reference translation. In case of any discrepancy in interpretation, the original Japanese version

shall prevail.]

August 3, 2020

Press Release

Company Name: Z Holdings Corporation

Representative: Kentaro Kawabe, President and Representative Director

(Code number: 4689 First Section, Tokyo Stock Exchange)

Inquiries: Ryosuke Sakaue,

Managing Executive Officer and Chief Financial Officer

TEL: 03-6779-4900

Company Name: LINE Corporation

Representative: Takeshi Idezawa, President and Representative Director

(Code number: 3938 First Section, Tokyo Stock Exchange)

Inquiries: Investor Relations

TEL: 03-4316-2050

Company name: SoftBank Corp.

Representative: Ken Miyauchi, Representative

Director, President & CEO

(Code number: 9434 First Section, Tokyo Stock Exchange)

Inquiries: Takashi Naito,

VP, Head of Finance and Accounting Division

TEL: 03-6889-2000

Company name: NAVER Corporation

Representative: Han Seong Sook, CEO

Inquiries: Kim Min, Investor Relations Leader (Email. dl_IR@navercorp.com)

Notice Concerning Conclusion of Business Alliance MOU by Z Holdings Corporation, LINE

Corporation, SoftBank Corp. and NAVER Corporation

Four companies including Z Holdings Corporation, a consolidated subsidiary of SoftBank Corp. ("ZHD") (President and Representative Director: Kentaro Kawabe), LINE Corporation, a consolidated subsidiary of NAVER Corporation ("LINE") (President and Representative Director: Takeshi Idezawa), SoftBank Corp. ("SoftBank") (Representative Director, President & CEO: Ken Miyauchi) and NAVER Corporation ("NAVER") (President and CEO: Han Seong Sook) (hereinafter, simply the "Four Companies") hereby announce that today, the Four Companies concluded a business alliance memorandum of understanding (the "Business Alliance MOU") in regard to the business alliance described in "2. Details of the Business Alliance" below, for the business integration of ZHD and LINE (the "Business Integration") which was announced in the "Announcement Regarding Definitive Agreement on Business Integration" on December 23, 2019 by ZHD and LINE, and the "Notice Concerning Entry into a Definitive Agreement

Relating to the Business Integration of Z Holdings Corporation (Securities Code: 4689) and LINE

Corporation (Securities Code: 3938)" on the same date by SoftBank and LINE, respectively (collectively the "Business Integration Press Releases of December 23, 2019"), pursuant to the resolutions of ZHD and LINE's respective board of directors' meetings held today, the decision made by SoftBank's Representative Director, President and CEO Ken Miyauchi based on the authorization by a resolution of SoftBank's board of directors' at a meeting held on July 20, 2020, and the decision made by NAVER's President & CEO Han Seong Sook.

1. Reason for the Business Alliance

As announced in the Business Integration Press Release on December 23, 2019, the Four Companies entered into a business integration agreement, which is the definitive agreement related to the Business Integration (the "Definitive Integration Agreement") on December 23, 2019.

As part of the Business Integration, the Four Companies concluded the Business Alliance MOU and are starting discussions, etc., so that on or after the date upon which all required consents have been obtained from the Fair Trade Commission for the implementation of the Business Integration pursuant to the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade and all related guidelines (collectively, the "Antimonopoly Laws") and from the relevant authorities under applicable foreign competition laws, they will, from such date until the completion of the Business Integration, to the extent relating to the Business Integration, and within with the scope and the methods permitted under the Business Integration Agreement, with respect to the businesses which the Four Companies that are parties to the Business Alliance MOU and their group companies (referring to, with respect to a person, the group of companies comprised of such person and its subsidiaries) (each, a "Business Alliance MOU Party Group") conduct in Japan, engage in the business alliance for the purpose of conducting joint business activities.

2. Content of the Business Alliance

In summary, the Four Companies agree under the Business Alliance MOU that conditioned upon having obtained all required consents from the Fair Trade Commission for the implementation of the Business Integration pursuant to the Antimonopoly Laws and from the relevant authorities under applicable foreign competition laws, and limited to the extent relating to the Business Integration, and limited to within the scope and the methods permitted under the Business Integration Agreement, until the Business Integration is completed through effectiveness of the share exchange between ZHD and the LINE Demerger Preparatory Company, within Japan they will (i) conduct information sharing, review, verification testing and discussions for the purpose of implementing the business alliance to engage in joint business activities with respect to items set out below relating to the businesses which one or more of the Business Alliance MOU Party Groups conduct (the "Business Alliance"), and (ii) if parties separately agree on the specific implementation of any joint business activities, the Business Alliance shall be carried out in accordance with such separate agreement. Any disclosure required by the relevant Business Alliance MOU Party Group under laws and regulations in regard to the implementation of the Business Alliance will be made in a timely manner.

  1. Organizational restructuring among the Business Alliance MOU Party Groups (excluding those that separately require notice for a business combination review under the Antimonopoly Laws and applicable competition laws and other applicable laws of each relevant country) and organizational restructuring internally within the Business Alliance MOU Party Groups
  2. Shared recruitment activities, transfers of human resources (including the transfers of human resources involving the merger and dissolution of departments) and personnel exchanges among the Business Alliance MOU Party Groups
  3. Implementation of joint development and technical cooperation
  4. Implementation of joint sales, promotions and campaigns
    • 2 -
  1. Mutual utilization of sales networks and referrals of customers
  2. Standardization of points and ecosystems
  3. Mutual utilization of data and user consent acquisitions (including required revisions of the privacy policy resulting therefrom, etc.)
  4. Linkage of IDs and services of LINE and Yahoo Japan Corporation, which is the wholly-owned subsidiary of ZHD
  5. Shared procurement of hardware, software, content and infrastructure
  6. Joint consultation and negotiation with stakeholders
  7. Having discussions on strategy, creating a business plan and conducting a presentation on integrated strategy
  8. Shared operational management
  9. Shared usage of information systems and back office functions
  10. Establishment of, and decision making by, the product committee
  11. Making decisions on consolidation of and discontinuing services and products and role-sharing arrangements regarding services and products, and implementation thereof
  12. In addition, any other joint business activities on which the Business Alliance MOU Parties that will implement such joint business activities separately agree, including but not limited to organizational restructuring, human resources, development, sales, sharing and utilization of data, linkage of services or operations among the Business Alliance MOU Party Groups and procurement

3. Parties to the Business Alliance

  • ZHD

(1)

Company name

Z Holdings Corporation

(2)

Address

1-3 Kioicho, Chiyoda-ku, Tokyo, Japan

(3)

Title and name of

President and Representative Director Kentaro Kawabe

representative

(4)

Lines of business

Holding Company

(5)

Capital

237,422 million yen

(6)

Founded

January 31, 1996

(7)

Main shareholders and

Shiodome Z Holdings GK

44.6%

percentage of

shareholdings

The Master Trust Bank of Japan, Ltd. (trust account)

4.1%

(as of March 31, 2020)

JP Morgan Chase Bank 385632

4.1%

Japan Trustee Services Bank, Ltd. (trust account)

3.5%

State Street Bank and Trust Company 505325

2.9%

BNYM as AGTCLTS Non Treaty JASDEC

1.6%

MLI for Client General Omni Non Collateral Non Treaty-PB

1.4%

Japan Trustee Services Bank, Ltd. (trust account 5)

1.2%

SSBTC Client Omnibus Account

1.1%

JP Morgan Chase Bank 385151

1.0%

(8)

Relationships of the

Relationship with SoftBank

- 3 -

parties

Capital

SoftBank is the indirect parent company of

ZHD,

holding 44.6% of its voting rights through

ZHD's

relationship

parent company, Shiodome Z Holdings GK.

Among the ZHD directors, representative director

Kentaro Kawabe is also a director of SoftBank,

director Masayoshi Son is also the chairman of the

Personal

board of directors of SoftBank, director Ken Miyauchi

is also the representative director of SoftBank, director

relationship

Kazuhiko Fujihara is also a director of SoftBank, and

director Taku Oketani is also an executive officer of

SoftBank.

ZHD and SoftBank have commercial relationships

Commercial

with respect to advertising placement, use of

relationship

communication services, point campaign, etc.

Whether

considered a SoftBank is a related party of ZHD. related party

Relationship with NAVER

Capital

Nothing to report

relationship

Personal

Nothing to report

relationship

Commercial

relationship

Whether

Nothing to report

considered a Not applicable related party

Relationship with LINE

Capital

Nothing to report

relationship

Personal

Nothing to report

relationship

Commercial

relationship

Whether

Nothing to report

considered a Not applicable related party

  1. Consolidated earnings and financial position over the past 3 years

Fiscal year

FY3/ 2018

FY3/ 2019

FY3/ 2020

Total capital

¥1,121,887 million

¥910,523 million

¥1,047,823 million

Total assets

¥2,516,633 million

¥2,429,601 million

¥3,933,910 million

Equity attributable to

¥177.97

¥160.96

¥162.01

parent company

- 4 -

owners per share

Sales revenue

¥897,185 million

¥954,714 million

¥1,052,943 million

Operating profit

¥185,810 million

¥140,528 million

¥152,276 million

Profit before taxes

¥193,177 million

¥123,370 million

¥135,676 million

Net profit attributable

¥131,153 million

¥78,677 million

¥81,675 million

to parent company

owners

Basic net profit per

¥23.04

¥14.74

¥16.88

share

Dividend per share

¥8.86

¥8.86

¥8.86

LINE

(1)

Company name

LINE Corporation

(2)

Address

1-6 Shinjuku 4-chome,Shinjuku-ku, Tokyo, Japan

(3)

Title and name of

President and Representative Director Takeshi Idezawa

representative

(4)

Lines of business

Advertising service based on the mobile messenger application "LINE,"

core businesses include the sales of stamps and game services, and

strategic businesses including Fintech, AI and commerce services.

(5)

Capital

97,284 million yen

(as of June 30, 2020)

(6)

Founded

September 4, 2000

(7)

Main shareholders and

NAVER Corporation

72.45%

percentage of

shareholdings

UBS AG London A/C IPB Segregated Client

2.80%

(as of June 30, 2020)

Shin Jung Ho

1.97%

(8)

Relationships of the

Relationship with SoftBank

parties

Capital

Nothing to report

relationship

Personal

Nothing to report

relationship

Commercial

LINE and SoftBank have commercial relationships

with use of communication services, etc.

relationship

Whether

considered a

Not applicable

related party

Relationship with NAVER

Capital

NAVER is LINE's parent company, holding

174,992,000 shares (72.45% of LINE's 241,544,142

relationship

total shares outstanding as of June 30, 2020).

- 5 -

NAVER also holds a portion of LINE's bonds with

share acquisition rights.

Personal

Hae Jin Lee, who is an executive officer of NAVER,

is also LINE's chairman of the board of directors.

relationship

Commercial

LINE and NAVER have commercial relationships

with respect to advertising placement, etc.

relationship

Whether

considered a

NAVER is the parent company of LINE.

related party

Relationship with ZHD

Capital

Nothing to report

relationship

Personal

Nothing to report

relationship

Commercial

Nothing to report

relationship

Whether

considered

a

Not applicable

related party

(9) Consolidated earnings and financial position over the past 3 years

Fiscal year

FY12/ 2017

FY12/ 2018

FY12/ 2019

Total capital

¥189,977 million

¥208,514 million

¥174,663 million

Total assets

¥303,439 million

¥486,587 million

¥541,352 million

Equity attributable to

¥779.30

¥833.87

¥659.96

parent

company

owners per share

Sales revenue

¥167,147 million

¥207,182 million

¥227,485 million

Operating profit

¥25,078 million

¥16,110 million

¥38,997 million

( means loss)

Net

profit

attributable

¥8,078 million

¥3,718 million

¥46,888 million

to

parent

company

owners

( mean loss)

Basic net profit per

36.56

15.62

196.07

share

( mean loss)

Dividend per share

- 6 -

  • SoftBank

(1)

Company name

SoftBank Corp.

(2)

Address

1-9-1Higashi-shimbashi,Minato-ku, Tokyo, Japan

(3)

Title and name of

Ken Miyauchi, Representative Director, President & CEO

representative

(4)

Lines of business

Provision of mobile communication services, sale of mobile devices,

provision of fixed line communication services, provision of internet

connection services

(5)

Capital

¥204,309 million

(6)

Founded

December 9, 1986

(7)

Main shareholders and

SoftBank Group Japan Corporation

62.07%

percentage of

shareholdings

The Master Trust Bank of Japan, Ltd. (trust account)

2.25%

(as of March 31, 2020)

Japan Trustee Services Bank, Ltd. (trust account)

1.54%

(Note 1) (Note 2)

Japan Trustee Services Bank, Ltd. (trust account 5)

0.77%

State Street Bank West Client-Treaty 505234

0.57%

State Street Bank And Trust Company 505103

0.51%

Japan Trustee Services Bank, Ltd. (trust account 1)

0.39%

Japan Trustee Services Bank, Ltd. (trust account 2)

0.36%

Japan Trustee Services Bank, Ltd. (trust account 6)

0.31%

Japan Trustee Services Bank, Ltd. (trust account 9)

0.31%

(8)

Relationships of the

Relationship with NAVER

parties

Capital

Nothing to report

relationship

Personal

Nothing to report

relationship

Commercial

Nothing to report

relationship

Whether

considered a

Not applicable

related party

Relationship with ZHD

SoftBank holds 2,125,366,950 shares (44.63% of

Capital

ZHD's 4,762,446,465 total shares outstanding

(excluding shares of treasury stock) as of March 31,

relationship

2020) through its wholly owned subsidiary, Shiodome

Z Holdings GK.

SoftBank's chairman of the board of directors,

Personal

Masayoshi Son, and SoftBank directors Ken Miyauchi

and Kazuhiko Fujihara are also directors of ZHD.

relationship

ZHD's representative director Kentaro Kawabe is also

a director of SoftBank.

- 7 -

ZHD and SoftBank have commercial relationships

Commercial

with respect to advertising placement, use of

relationship

communication services, point campaign, etc.

Whether

SoftBank is the parent company of ZHD based on the

considered a

actual control criteria.

related party

Relationship with LINE

Capital

Nothing to report

relationship

Personal

Nothing to report

relationship

Commercial

LINE and SoftBank have commercial relationships

with use of communication services, etc.

relationship

Whether

considered a

Not applicable

related party

(9)

Consolidated earnings and financial position over the past 3 years

Fiscal year

FY3/ 2018

FY3/ 2019 (note 3)

FY3/ 2020

Total capital

¥885,260 million

¥2,022,567 million

¥1,707,564 million

Total assets

¥5,305,567 million

¥8,036,328 million

¥9,792,258 million

Equity attributable to

¥187.94

¥312.95

¥211.03

parent company

owners per share

Sales revenue

¥3,582,635 million

¥4,656,815 million

¥4,861,247 million

Operating profit

¥637,933 million

¥818,188 million

¥911,725 million

Profit before taxes

¥597,554 million

¥746,113 million

¥811,195 million

Net profit attributable

¥400,749 million

¥462,455 million

¥473,135 million

to parent company

owners

Basic net profit per

¥97.64

¥96.60

¥99.27

share attributed for

parent company

owners

Dividend per share

¥181.43

¥37.50

¥85.00

(Note 1) Shareholding percentages do not include the 46,000,000 shares of treasury stock retained by SoftBank (as of March 31, 2020).

(Note 2) The shareholding percentage of SoftBank Group Japan Corporation set out herein represents the ratio number of shares (2,942,919,470 shares) following the transfer of 240,000,000 SoftBank's shares by that SoftBank Group Japan Corporation carried out on May 26, 2020 to the number of SoftBank's total shares outstanding (excluding shares of treasury stock) as of March 31, 2020 (4,741,145,170 shares).

(Note 3) The numerical values for the fiscal year ending March 2019 have been retroactively corrected in line with the transactions under common control (acquisition of ZHD shares) that were carried out during

- 8 -

the fiscal year ending on March 31, 2020.

  • NAVER

(1)

Company name

NAVER Corporation

(2)

Address

Naver Green Factory, 6, Buljeong-Ro,Bundang-Gu,Seongnam-Si,

Gyeonggi-Do, 13561, Korea

(3)

Title and name of

President & CEO Han Seong-sook

representative

(4)

Lines of business

Operation of portal site (NAVER), contents business

(5)

Capital

(as of December 31,

16,481 million KRW

2019)

(6)

Founded

June 2, 1999

(7)

Main shareholders and

National Fund Service

11.52%

percentage of

shareholdings

BlackRock Fund Advisors

5.03%

(as of December 31,

Harris Associates

5.01%

2019)

(8)

Relationships of the

Relationship with SoftBank

parties

Capital

Nothing to report

relationship

Personal

Nothing to report

relationship

Commercial

Nothing to report

relationship

Whether

considered a

Nothing to report

related party

Relationship with ZHD

Capital

Nothing to report

relationship

Personal

Nothing to report

relationship

Commercial

relationship

Whether

Nothing to report

considered a Nothing to report related party

Relationship with LINE

Capital

NAVER is LINE's parent company, holding 174,992,000 shares (72.45% of LINE's 241,544,142

total shares outstanding as of June 30, 2020).

relationship

NAVER also holds a portion of LINE's bonds with share acquisition rights.

- 9 -

Personal

Hae Jin Lee, who is an executive officer of NAVER,

is also LINE's chairman of the board of directors.

relationship

Commercial

ZHD and NAVER have commercial relationships with

respect to advertising placement, etc.

relationship

Whether

considered

a

NAVER is the parent company of LINE.

related party

(9)

Consolidated earnings and financial position over the past 3 years

Fiscal year

FY12/ 2017

FY12/ 2018

FY12/ 2019

Consolidated net

5,305,186,234,949

5,949,140,513,293

6,503,926,068,580

assets

KRW

KRW

KRW

Consolidated total

8,019,251,559,914

9,881,190,909,324

12,299,527,120,786

assets

KRW

KRW

KRW

Consolidated net

36,465KRW

40,682KRW

44,690KRW

assets per share

Consolidated sales

4,678,468,928,032

5,586,904,533,355

6,593,400,065,244

revenue

KRW

KRW

KRW

Consolidated

1,179,187,806,331

942,532,561,543

710,070,173,513

operating profit

KRW

KRW

KRW

Consolidated ordinary

1,195,828,988,960

1,111,672,274,838

866,722,133,963

profit

KRW

KRW

KRW

Net profit attributable

772,879,579,921

648,812,902,730

583,051,904,649

to parent company

KRW

KRW

KRW

owners

Consolidated net

5,293KRW

4,294KRW

2,727KRW

profit per share

Dividend per share

289KRW

314KRW

376KRW

4. Schedule

(1)

Date of SoftBank board resolution

July 20, 2020

(2)

Date of ZHD and LINE's board resolutions

August 3, 2020 (today)

(3)

Date of NAVER CEO approval

August 3, 2020 (today)

(4)

Execution of Business Alliance Agreement

August 3, 2020 (today)

The commencement of this Business Alliance is conditioned upon obtaining all required consents and approvals from the Fair Trade Commission under Antimonopoly Laws and from the relevant authorities under applicable foreign competition laws with respect to the Business Integration.

5. Future Outlook

The effect of this Business Alliance on the performance of ZHD during the fiscal year ending March 2021, the performance of LINE during the fiscal year ending December 2020, and the performance of SoftBank during the fiscal year ending March 2021 is undetermined. We note it is thought that in the medium- to long-

- 10 -

term it will contribute to the increase of the Four Companies' corporate value. Going forward we will

promptly disclose any event that could change the earnings forecast.

- 11 -

Disclaimer

Z Holdings Corporation published this content on 03 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2020 07:33:21 UTC


© Publicnow 2020
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Technical analysis trends Z HOLDINGS CORPORATION
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Income Statement Evolution
Consensus
Sell
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Mean consensus OUTPERFORM
Number of Analysts 10
Average target price 799,50 JPY
Last Close Price 622,10 JPY
Spread / Highest target 44,7%
Spread / Average Target 28,5%
Spread / Lowest Target 10,9%
EPS Revisions
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Kentaro Kawabe President, CEO & Representative Director
Manabu Miyasaka Chairman
Ryosuke Sakaue Chief Financial Officer
Masatsugu Shidachi Chief Information Officer & Executive Officer
Chiaki Fujimon Chief Technology Officer
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