Execution of the Basic Agreement
for the Management Integration
October 15, 2015 (Thu.)
FamilyMart Co., Ltd.
President
Isamu Nakayama
UNY Group Holdings Co., Ltd.
President
Norio Sako
Summary of the Basic Agreement
Transaction
Structure
Same structure as the announcement on March 10, 2015
FamilyMart and UNY Group to merge and form new HD
FamilyMart and CKS to form new CVS company
Merger Ratio
HQ: HD and CVS (Tokyo), GMS (Inazawa City, Aichi)
Allot 0.138 FamilyMart shares to 1 UNY Group HD share
Integrated
Business Plan
Set business plan for 5 years from the Management Integration
Agreed framework of key strategies to achieve the
business plan
Preparation
Form new preparation framework
Discuss and determine key issues, including management
structure and CVS brand
Early restructuring of unprofitable stores
Financial Impact
Current Period (ending Feb 2016) | Pro Forma (within 5 years) | |||
FamilyMart | UNY Group HD | Total | New Company | |
Group Revenues in Japan | ¥2.0tn | ¥1.8tn | ¥3.8tn | ¥5tn or larger |
Operating Income (Consolidated) | ¥46.9bn | ¥21.0bn | ¥67.9bn | ¥100.0bn or larger |
Net Income (Consolidated) | ¥21.0bn | ¥1.5bn | ¥22.5tn | ¥60.0bn or larger |
ROE (Consolidated) | 7.5% | 0.5% | -- | 12% or larger |
Stores (CVS, GMS, SM in Japan) | 11,930 stores | 6,712 stores | 18,642 stores | 20,000 or more stores |
Stores (CVS, GMS in Overseas) | 5,960 stores | 4 stores | 5,964 stores | 10,000 or more stores |
Notes: Financial numbers for the fiscal year ending February 2016.
Expected number of stores as at the end of February 2016, including area franchise stores.
Post-Integration Approaches
CVS
Integration of CVS brands
Enhanced procurement
Enhanced product development
Integration of infrastructure (e.g. distribution centers)
Integration of IT systems
GMS / SM
Focus on Tokai and Kanto area
Utilization of procurement and service of the CVS business
Development of new store format
Others
Cooperation in E-Commerce
Further utilization of business footprint / formation of new business model
Furthermore, implement fundamental restructuring, including divestiture of unprofitable stores, to maximize profitability
Discussions for the Management Integration
Form an Integration Committee
(instead of current Integration Preparation Committee)
Other considerations
Group principles
Company / group name
CVS brand (to be unified)
Board / management structure
HR
Envisioned Timeline
Execution of the Basic Agreement | October 15, 2015 (Today) |
Execution of absorption-type merger agreement and absorption-type demerger agreement | By April 2016 (Scheduled) |
AGM (FamilyMart and UNY Group HD) to approve the absorption-type merger and absorption-type demerger | May 26, 2016 (Scheduled) |
Last trading day (UNY Group HD) | August 26, 2016 (Scheduled) |
Delisting (UNY Group HD) | August 29, 2016 (Scheduled) |
Closing / Effective date of the absorption-type merger and absorption-type demerger | September 2016 (Scheduled) |
'Leading Global Retail Group in Japan'
This presentation has been prepared only for the purpose of informing the public of the Management Integration. This has not been prepared for soliciting sales or purchases of shares or other securities of FamilyMart or UNY Group HD. This presentation includes forward-looking statements. These forward-looking statements contain forecasts, plans or predictions, actual results of which may differ materially from any forward-looking statements contained herein due to trends in the Japanese economy, competition from competitors, progress in the execution of business plans, increase in raw material prices, personnel expenses or property rents among other factors.
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