April 23,

2021

Company name

Rakuten Group, Inc.

Representative

Hiroshi Mikitani

Chairman and CEO

(Stock Code:

4755

Tokyo Stock Exchange First Section)

Announcement of Succession of "Rakuten Delivery" and "Rakuten Realtime Takeout"

Businesses to Gurunavi, Inc. by Company Split (Simplified absorption-type split)

Rakuten Group, Inc. (hereinafter "Rakuten") announces that with an effective date of July 1, 2021 (expected), the company has decided that the "Rakuten Delivery" and "Rakuten Realtime Takeout" business conducted by the company will be succeeded to Gurunavi, Inc. (hereinafter "Gurunavi"), by way of a company split (hereinafter referred to as the "Company Split"), as described below.

1. Purpose of the company split

Rakuten and Gurunavi signed a capital and business alliance agreement in July 2018, whereby Rakuten acquired 4,677,600 shares (9.61% of the total number of issued shares) of Gurunavi in August. Also, collaboration between Rakuten Member IDs and Gurunavi Member IDs started from October 2018, and we have promoted our business alliance mainly in the field of online reservations, making it possible to earn Rakuten Super Points for Gurunavi's online reservations, etc.

In addition, after Rakuten additionally acquired 2,339,700 shares (4.81% of the total number of issued shares) of Gurunavi in May 2019, we strengthened the alliance through collaboration between "Rakuten Realtime Takeout", a takeout support service for restaurants which Rakuten started amidst the Coronavirus crisis and the Gurunavi website, etc. Due to these initiatives, Rakuten has improved service convenience through the great ability of attracting customers and huge network with restaurants of Gurunavi. On the other hand, Gurunavi has increased touch points with users by utilizing the "Rakuten Ecosystem". By enhancing the value proposition, Gurunavi will accelerate the expansion of number of Gurunavi users and online reservations, aiming for improvement in sending customers to restaurants.

In order to realize a stronger alliance and further business growth by utilizing both company's assets efficiently, Rakuten decided to transfer "Rakuten Delivery" and "Rakuten Realtime Takeout" to Gurunavi. "Rakuten Delivery" launched its service in February 2002, and has grown into a service that allows customers to order from a wide range of menus from more than 12,000 stores nationwide."Rakuten Realtime Takeout" launched in May 2020, has cooperated with Gurunavi as a takeout support service for restaurants that allows customers to pre-order and settle restaurant products and receive them at the store at a specified time. By consolidating Rakuten's restaurant-

related businesses into Gurunavi through the company split, we will provide comprehensive food services that realize cross-use such as delivery and take-out services in addition to eat-in reservations. In addition to improving user convenience, Gurunavi expects to increase the number of affiliated stores by expanding its service area.

Rakuten will continue to promote collaboration with Gurunavi through the cooperation of Rakuten IDs and "Rakuten Points," aiming to gain market share through a system centered on the expansion of the "Rakuten Ecosystem" in the restaurant area.

2. Summary of the company split

(1) Outline of the company split

Gurunavi Board of Directors resolution

April 23, 2021

Rakuten Board of Directors resolution

April 23, 2021

Contract date

April 23, 2021

Effective date of the company split

July 1, 2021

NoteSince this company split corresponds to simplified absorption-type split prescribed in Article 784, Paragraph 2 of the Company Act for Rakuten and Article 796, Paragraph 2 of the Company Act for Gurunavi, a shareholders meeting of the Company to approve this company split will not be held.

(2) Split method

An absorption-type company split in which Rakuten is the splitting company and Gurunavi is the successor company.

(3) Details of allotments related to the company split

Rakuten plans to receive a payment of JPY 13 million from Gurunavi as a consideration of the company split.

  1. Handling of subscription rights to shares and bonds accompanying the company split There is no corresponding matter.
  2. Increase / Decrease of capital

There is no corresponding matter.

(6) Rights and obligations to be succeeded

Rights and obligations such as assets, liabilities and contractual positions regarding the company split which is prescribed in absorption-type company split contract will be succeeded.

  1. Prospect of fulfillment of obligations
    The company split has no impact on the successor company's ability to fulfill obligations.

3 Evidence of allotments related to the company split

(1) Basis of and reasons for details of allotment related to the Company Split

Regarding the calculation of the money received by Rakuten in the Company Split, data such as the past performance of the business subject to the split, the number of current users and affiliated stores, the competitive environment in the domestic food delivery / takeout market, and future business growth was considered, and the value of this project was calculated after taking into consideration the growth potential of the business in the future, and the decision was made after discussions between the two companies.

(2) Matters related to calculation

In this case, we have not obtained a calculation report from a third-party calculation organization, but we calculated it using a general corporate value calculation method such as the DCF method, and determined that the consideration for the business to be split is appropriate.

  1. Expectation of delisting and reasons thereof There is no corresponding matter.
  2. Measures to ensure the fairness

There is no corresponding matter.

  1. Measures to avoid conflicts of interest There is no corresponding matter.

4 Overview of companies involved in the company split

  1. Splitting company in absorption-type split (As of December 31, 2020)

(1)

Company name

Rakuten Group, Inc.

(2)

Head office

1-14-1 Tamagawa, Setagaya-ku, Tokyo

(3)

Representative

Hiroshi Mikitani, Chairman, President and CEO

(4)

Main business

Internet Services, FinTech etc.

(5)

Capital

205,924 million yen

(6)

Date of establishment

February 7, 1997

(7)

Total number of issued shares

1,434,573,900 shares

(8)

Fiscal year end

December 31

(9)

Number of employees

23,841

(10)

Main business partner

Rakuten Card Co., Ltd.

Rakuten Payment, Inc.

(11)

Main financing banks

Mizuho Bank, Ltd.

Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Trust Bank, Limited

MUFG Bank, Ltd.

Development Bank of Japan Inc.

(12)

Major shareholders and

Crimson Group, LLC (16.62%)

percentage of shares held

Hiroshi Mikitani (12.94%)

(13)

Relationship between Rakuten and Gurunavi

Capital

Rakuten holds 7,017,300 shares of Gurunavi (shareholding ratio

14.42% of outstanding no. of shares).

Personnel

2 executives of Rakuten are serving as outside directors of

Gurunavi. In addition, employees are seconded to both

Gurunavi and Rakuten and its consolidated subsidiaries.

Business

Coordination of member IDs and point services, and sales of

products and services of both companies, to collaborate and

promote usage of services.

Related party status

Rakuten is an other associated company and the largest and

major shareholder of Gurunavi. Also, Gurunavi is an equity-

method affiliate of Rakuten.

(14)

Financial position and business performance for the last three years

Fiscal year (consolidated)

Year ended

Year ended

Year ended

December 31,

December 31,

December 31,

2018

2019

2020

Total equity

776,207

737,200

629,014

Total assets

7,345,002

9,165,697

12,524,438

Total equity attributable to owners of

572.83

542.43

446.78

the Company per share (yen)

Revenue

1,101,480

1,263,932

1,455,538

Operating income (loss)

170,425

72,745

(93,849)

Net income (loss)

141,889

(33,068)

(115,838)

Net income (loss) attributable to

142,282

(31,888)

(114,199)

owners of the Company

Basic earnings (loss) per share

105.43

(23.55)

(84.00)

attributable to owners of the Company

(yen)

Dividend per share (yen)

4.50

4.50

4.50

  • Note 1: In millions of yen unless specified otherwise.
      1. The shareholding ratio is calculated based on the total number of shares issued after deduction of treasury stock.
    1. Successor company in absorption-type split (As of March 31, 2021)

(1)

Company name

Gurunavi, Inc.

(2)

Head office

1-2-2 Yurakucho, Chiyoda-ku, Tokyo

(3)

Representative

Akio Sugihara, President and Representative Director

(4)

Main business

Web-based information provision relating to restaurants etc.

using the platform of PC and smartphones etc. Provision of

support service associated with the management of restaurants

etc. and other related business

(5)

Capital

2,334 million yen

(6)

Date of establishment

October 2, 1989

(7)

Total number of issued shares

48,675,100 shares

(8)

Fiscal year end

March 31

(9)

Number of employees

1,791

(10)

Main business partners

Food service company and restaurants in Japan, etc.

(11)

Main financing banks

Sumitomo Mitsui Banking Corporation

Mizuho Bank, Ltd.

MUFG Bank, Ltd.

Rakuten Bank, Ltd.

(12)

Major shareholders and

Rakuten Group, Inc. (14.96%)

percentage of shares held

Hisao Taki (12.72%)

  1. Financial position and business performance for the last three years

Fiscal year (consolidated)

Year ended

Year ended

Year ended

March 31, 2018

March 31, 2019

March 31, 2020

Net assets

19,186

18,704

19,270

Total assets

25,457

23,797

23,979

Net assets per share (yen)

409.70

398.48

409.90

Net sales

36,226

32,728

30,927

Operating income

4,742

1,216

1,821

Ordinary income

4,809

1,289

1,894

Net income attributable to owners of

3,192

581

949

parent

Basic earnings per share (yen)

68.27

12.42

20.26

Dividend per share (yen)

44.00

8.00

8.00

  • Note 1: In millions of yen unless specified otherwise.
    1. The shareholding ratio is calculated based on the total number of shares issued after deduction of treasury stock.

5Overview of the business unit to be split and succeeded

(1) Business to be split

"Rakuten Delivery" which provides delivery and delivery order service.

"Rakuten Realtime Takeout" which provides takeout support service for restaurants.

  1. Business results of the business to be split

Revenue: JPY 915 million (For the year ended 2020)

  1. Assets and liabilities to be split

Contract acquisition assets: JPY 13 million

6Post-company split details

Following this company split, there are no changes to the business name, head office, title and name of representative, main business, shareholders' equity and fiscal year end of the Company. Net assets and total assets are not finalized at this time.

7Impact on business results

No material impact on Rakuten Group consolidated financial results.

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Rakuten Inc. published this content on 23 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 April 2021 06:11:06 UTC.