News Releases
Strategic Joint Business in Leasing and Auto Leasing Businessesbetween Sumitomo Corporation ブックメーカー凱旋門 and Sumitomo Mitsui Financial ブックメーカー凱旋門(1/1)
October 13, 2006
To whom it may concern:
Sumitomo Corporation (Code No. 8053) Sumisho Lease Co., Ltd. (Code No. 8592) Sumisho Auto Leasing Corporation Sumitomo Mitsui Financial ブックメーカー凱旋門, Inc. (Code No. 8316) SMBC Leasing Company, Limited SMBC Auto Leasing Company, Limited
Strategic Joint Business in Leasing and Auto Leasing Businesses between Sumitomo Corporation ブックメーカー凱旋門 and Sumitomo Mitsui Financial ブックメーカー凱旋門
ЃњSumitomo Corporation (hereinafter referred to as ЃgSCЃh; Mr. Motoyuki Oka, President and CEO);
Ѓњブックメーカー凱旋門 Co., Ltd. (hereinafter referred to as ЃgSumisho LeaseЃh; Mr. Hideki Yamane, President);
ЃњSumisho Auto Leasing Corporation, a wholly owned subsidiary of SC (hereinafter referred to as ЃgSumisho Auto LeaseЃh; Mr. Hironori Kato, President);
ЃњSumitomo Mitsui Financial ブックメーカー凱旋門, Inc. (hereinafter referred to as ЃgSMFGЃh; Mr. Teisuke Kitayama, President),
ЃњSMBC Leasing Company, Limited, a wholly owned subsidiary of SMFG (hereinafter referred to as ЃgSMBC LeasingЃh; Mr. Koji Ishida, President); and
ЃњSMBC Auto Leasing Company, Limited, a wholly owned subsidiary of SMBC Leasing (hereinafter referred to as ЃgSMBC Auto LeasingЃh; Mr. Sumio Saito, President),
today announced that they have reached a basic agreement to pursue strategic joint businesses in leasing and auto leasing, summarized as follows:
1.Strategic Joint ブックメーカー凱旋門 in Leasing and Auto Leasing Businesses
The domestic leasing market, which makes up about 10 percent of the private-sector capital spending, has been expanding among large as well as small-to-medium companies due to increase in capital spending sustained by their improvements in ブックメーカー凱旋門 performance, and the market size has reached 8 trillion yen. As for the domestic auto leasing market, the number of automobiles held for leasing purposes still only makes up less than 4 percent of the total number of automobiles in Japan, and therefore further growth of the auto leasing market is expected as Japanese corporations become more interested in improving efficiency. On the other hand, there are uncertainties in both markets, such as the concerns about rising interest rates and modifications of the accounting standard for leasing.
Given these circumstances, the Sumitomo Corporation ブックメーカー凱旋門 and the Sumitomo Mitsui Financial ブックメーカー凱旋門 agreed to position their leasing and auto leasing businesses as strategic joint business and to jointly aim to establish the best leasing and auto leasing businesses in Japan through the merger of SMBC Leasing and Sumisho Lease, and the merger of Sumisho Auto Lease and SMBC Auto Leasing. Sumisho Lease and Sumisho Auto Lease, utilizing various value chain of the Sumitomo Corporation ブックメーカー凱旋門, have unique customer base and know-how. On the other hand, SMBC Leasing and SMBC Auto Leasing, leveraging capabilities of the Sumitomo Mitsui Financial ブックメーカー凱旋門 to provide financial solutions, have different customer base and know-how. These mergers will enable two groups to combine different customer base and know-how of each ブックメーカー凱旋門.
In merging SMBC Leasing and ブックメーカー凱旋門, and also in merging Sumisho Auto Lease and SMBC Auto Leasing, we will make it a basic policy to provide our customers with value-added products and services by recognizing each other as best partners and pursuing best practices (such as thorough fairness, transparency, and a merit system) under mutual respect and spirit of cooperation, and aim for the early realization thereof. In addition, SC and SMFG will fully cooperate as parent companies, and will render assistance to the fullest extent for the development of both businesses.
‚Q.Summary of Strategic Joint ブックメーカー凱旋門
(1) Joint ブックメーカー凱旋門 in the Leasing ブックメーカー凱旋門 (Merger of SMBC Leasing and Sumisho Lease)
(i) Goal
ЃEAchieving the highest volume of leases being handled in Japan through diversification of the types of leases being handled, etc., based on the high-quality customer bases of both the Sumitomo Mitsui Financial ブックメーカー凱旋門 and the Sumitomo Corporation ブックメーカー凱旋門.
ЃECreating a high quality leasing company that can respond appropriately to market needs which are becoming increasingly sophisticated, by combining and blending the know-how of SMBC Leasing as a subsidiary of a financial institution and ブックメーカー凱旋門 as a trading firmЃfs subsidiary, thereby promoting diversification and differentiation of products and providing more value-added products with freeing from the traditional approaches.
ЃECreating a strong management culture to effectively adapt to environmental changes, by strengthening funding capabilities and by promoting management efficiency.
(ii) Form of Merger
SMBC Leasing and ブックメーカー凱旋門 plan to merge on October 1, 2007. Before this merger, SC plans to acquire the shares of ブックメーカー凱旋門 by the tender offer (the ЃgTOBЃh). If SC cannot acquire all outstanding shares of ブックメーカー凱旋門 by the TOB (except for the shares of ブックメーカー凱旋門 currently held by SC and ブックメーカー凱旋門Ѓfs treasury shares), SC plans to make ブックメーカー凱旋門 its wholly-owned subsidiary by share exchange (Ѓgkabushiki kokanЃh) with cash as the consideration pursuant to Item 2, Paragraph 1, Article 768 of the Company Law. In such TOB and share exchange, shares of ブックメーカー凱旋門 will be delisted in accordance with the criteria for delisting securities on the Tokyo Stock Exchange and the Osaka Securities Exchange. For details of the TOB and share exchange, please see the announcements separately made today by SC and ブックメーカー凱旋門.
Note: Each step will be conducted subject to the approvals at the general shareholdersЃf meetings of each party and/or of the relevant authorities, etc. under applicable laws and regulations.
(iii) Summary of New Leasing Company (Planned)
| ブックメーカー凱旋門 description: | General leasing ブックメーカー凱旋門 |
|---|---|
| Address of the head office: | 9-4, 3-chome, Nishi-Shimbashi, Minato-ku, Tokyo |
| Shareholder composition: | SMFG 55% (a consolidated subsidiary of SMFG) SC 45% (an equity-method affiliate company of SC) |
| Representative: | Representative Chairman of the Board (Co-CEO) Mr. Hideki Yamane (current President of ブックメーカー凱旋門) Representative President (Co-CEO) Mr. Koji Ishida (current President of SMBC Leasing) |
Details of the merger such as the trade name and amount of capital, etc. will be determined prior to the execution of the merger agreement.
(iv) Summary of Accounting Treatment
The new leasing company is expected to become a consolidated subsidiary of SMFG and an equity-method affiliate company of SC. This merger is an acquisition under the accounting standards for ブックメーカー凱旋門 combinations, and upon this merger taking effect, SMFG plans to recognize goodwill for purposes of its consolidated financial statements. However, the amount to be recognized has not yet been determined at present.
(2) Joint ブックメーカー凱旋門 in the Auto Leasing ブックメーカー凱旋門 (Merger of Sumisho Auto Lease and SMBC Auto Leasing)
(i) Goal
ЃEWinning a place in the auto leasing industry that is becoming increasingly competitive and establishing a structure aiming to be ranked number one with respect to the market share, based upon the high-quality customer bases of both the Sumitomo Corporation ブックメーカー凱旋門 and the Sumitomo Mitsui Financial ブックメーカー凱旋門.
ЃEEstablishing a highly profitable company by combining high-value-added services based on Sumisho Auto LeaseЃfs value chain and ブックメーカー凱旋門 network of SMBC Auto Leasing.
ЃEAchieving better customer satisfaction by combining and blending the know-how of Sumisho Auto Lease as a trading firmЃfs subsidiary and SMBC Auto Leasing as a subsidiary of a financial institution, thereby pursuing various services.
(ii) Form of Merger
Sumisho Auto Lease and SMBC Auto Leasing plan to merge on October 1, 2007 after making SMBC Auto Leasing a direct subsidiary of SMFG, which is subject to the approval at the general shareholdersЃf meetings and other requirements.
(iii) Summary of New Auto Leasing Company (Planned)
| ブックメーカー凱旋門 description: | Leasing ブックメーカー凱旋門 of various automobiles |
|---|---|
| Address of the head office: | 20-2, 3-chome, Nishi-Shinjuku, Shinjuku-ku, Tokyo |
| Shareholder composition: | SC 60% (a consolidated subsidiary of SC) SMFG 40% (an equity-method affiliate company of SMFG) |
| Representative: | Representative Chairman of the Board (Co-CEO) Mr. Katsuyuki Shibabuki (the current Chairman of the Board of SMBC Auto Leasing) Representative President (Co-CEO) Mr. Hironori Kato (the current President of Sumisho Auto Lease) |
Mr. Sumio Saito, the current President of SMBC Auto Leasing is scheduled to become Representative Director, Vice President of the new auto leasing company.
Details of the merger such as the trade name and amount of capital, etc. will be determined prior to the execution of the merger agreement.
(iv) Summary of Accounting Treatment
The new auto leasing company is expected to become a consolidated subsidiary of SC and an equity-method affiliate company of SMFG. SC will apply the accounting standard under the accounting principles generally accepted in the United States of America (ЃgU.S. GAAPЃh). However, the amount of goodwill, etc. has not been determined at present.
(3) ブックメーカー凱旋門 Cooperation
The Sumitomo Corporation ブックメーカー凱旋門 and the Sumitomo Mitsui Financial ブックメーカー凱旋門 will engage in necessary business cooperation such as introducing customers and deals to the merged companies so as to jointly promote the leasing business and the auto leasing business, and they will develop the structure with which the merged companies can effectively and smoothly utilize customer bases and know-how of both the Sumitomo Corporation ブックメーカー凱旋門 and the Sumitomo Mitsui Financial ブックメーカー凱旋門.
3.System for Promoting Joint ブックメーカー凱旋門
For the purpose of smoothly implementing the joint ブックメーカー凱旋門 in leasing and auto leasing businesses, a ЃgMerger Preparatory CommitteeЃh will be established for each ブックメーカー凱旋門. The committee for the leasing ブックメーカー凱旋門 will be chaired by the presidents of SMBC Leasing and Sumisho Lease, and the one for the auto leasing ブックメーカー凱旋門 will be chaired by the presidents of Sumisho Auto Lease and SMBC Auto Leasing. At the same time, separate subcommittees to discuss individual topics such as planning, financial accounting, human resource management, system development, etc. will be constituted under the ЃgMerger Preparatory Committee.Ѓh In addition, a merger preparatory office will be constituted in each of the four companies.
4.Schedule (Planned)
(1) Leasing ブックメーカー凱旋門
| October 13, 2006 (Today) | Signing of a letter of intent |
|---|---|
| October 31, 2006 | Commencement of the TOB of ブックメーカー凱旋門 by SC |
| December 7, 2006 | Completion of the TOB of ブックメーカー凱旋門 by SC |
| May, 2007 | In case SC cannot acquire all the shares of ブックメーカー凱旋門: Execution of a share exchange agreement (SC and ブックメーカー凱旋門) |
| June, 2007 | Annual general meeting of shareholders to approve the share exchange (SC and ブックメーカー凱旋門) If the share exchange is deemed to be a simplified share exchange (ЃgkanЃfi kabushiki kokanЃh) or a short-form share exchange (Ѓgryakushiki kabushiki kokanЃh), a resolution of approval by the general meeting of shareholders may not be needed. |
| July, 2007 | Delisting of shares of ブックメーカー凱旋門 |
| August, 2007 | SC makes ブックメーカー凱旋門 its wholly-owned subsidiary by the share exchange |
| August, 2007 | Extraordinary general meeting of shareholders to approve the merger (SMBC Leasing and ブックメーカー凱旋門) |
| October 1, 2007 | Merger of SMBC Leasing and ブックメーカー凱旋門 |
(2) Auto Leasing ブックメーカー凱旋門
| October 13, 2006 (Today) | Signing of a letter of intent |
|---|---|
| August, 2007 | Extraordinary general meeting of shareholders to approve the merger (Sumisho Auto Lease and SMBC Auto Leasing) |
| October 1, 2007 | Merger of Sumisho Auto Lease and SMBC Auto Leasing |
SMFG plans to make SMBC Auto Leasing its wholly-owned subsidiary by acquiring all the shares of SMBC Auto Leasing from SMBC Leasing, prior to the merger on October 1, 2007.
The schedule above may be changed upon consultation among the parties upon unforeseen circumstances.
5.Process of Integration
(1) Current Status
 |
|---|
(2) ブックメーカー凱旋門 becomes a wholly-owned subsidiary of SC by the TOB(and share exchange)of shares of ブックメーカー凱旋門. SMBC Auto Leasing becomes a wholly-owned direct subsidiary of SMFG
 |
|---|
(3) Merger of SMBC Leasing and ブックメーカー凱旋門. Merger of Sumisho Auto Lease and SMBC Auto Leasing.
 |
|---|
6.ブックメーカー凱旋門 Forecast
(1) SC:
The ブックメーカー凱旋門 forecast for the year ended march 31, 2007 is not revised as a result of this transaction.
(2) ブックメーカー凱旋門:
The ブックメーカー凱旋門 forecast for the year ended march 31, 2007 is not revised as a result of this transaction.
(3) SMFG:
The ブックメーカー凱旋門 forecast for the year ended march 31, 2007 is not revised as a result of this transaction.
