Basic Agreement on Merger of Central Finance Co., Ltd., OMC Card, Inc., and QUOQ Inc. (1/1)
Sumitomo Mitsui Financial Group, Inc.
(Code: 8316)
Sumitomo Mitsui Banking Corporation
Central
Finance Co., Ltd.
(Code: 8588)
OMC Card, Inc.
(Code: 8258)
QUOQ Inc.
Basic Agreement on Merger
of Central Finance Co., Ltd., OMC Card, Inc., and QUOQ
Inc.
1. Objectives of the
Merger
The Japanese credit card market has been steadily
expanding and further growth is expected amid the spread of new domains of
settlement, including petty cash settlement. On the other hand, under the requirement
for development of new technologies and services, such as electronic money, and
for investment in systems that meet more deep, sophisticated and diversified
customers乫 needs, and under the influence of the amendment to the Money Lending
Business Law, among other factors, the business environment surrounding the
industry has been dramatically changing, putting the industry at a major
turning point. Furthermore, in view
of the proposed revision to the Installment Sales Law to reflect the trend of
increasing consumer protection, the installment credit business also requires
restructuring to establish a new business model.
With these circumstances in mind, CF, OMC and QUOQ
have basically agreed to merge in order to bring into existence one of the largest
consumer finance companies in Japan that is focused on the credit card and
installment credit businesses. It
will be equipped with expertise and agility through the combination and
integration of the customer bases, sales power, know-how and other assets of
each company.
CF, based in the Chubu area, has a nationwide network
which covers all of
OMC, as a credit card company with its origin in
retail business, has worked on the 15-minute immediate card issuance screening,
the only service in the industry, through the viewpoint of a citizen who lives
an ordinary life. In addition, OMC
has recorded best-in-industry card utilization rates by the use of advanced
database marketing. With the advantage of such unique know-how on membership
solicitation and marketing power, OMC has achieved a top-class frequency of use
and competency of soliciting cardholders.
QUOQ is focused on the field of shopping credit, where
it is one of the most active service providers in the credit sales industry and
is aggressively pursuing its collection agency operations, which have an
industry-leading track record of handling voluminous transactions. Another key business of QUOQ is its
unique petty claims purchasing scheme for a bulk purchase of small accounts
receivables, monthly tuition receivables and similar claims.
While keeping a sense of unity as a member of SMFG
group and at the same time maintaining management independence as a listed
corporation, the Merged Company will seek to create a people-oriented original
business model with characteristics not seen in other companies and will aim at
maximizing its corporate value through the development and furtherance of the
above-described strengths of each company, using as driving force the synergy
of the credit card and installment credit businesses as a result of the merger.
Taking into consideration that CF乫s core management
bases are located mainly in the Tokai area, the Merged Company will continue
focusing on that area as one of its key management bases, and seek to build a
close alignment with SMFG乫s and SMBC乫s marketing strategy for the Tokai area.
As announced in another press release separately issued
today with the title 乬Credit Card Business Strategy of Sumitomo
Mitsui Financial Group,乭 SMFG and SMBC
will support the Merger, aimed at establishing the number one credit card
business entity in Japan through establishment of a close partnership between the
Merged Company and Sumitomo Mitsui Card Co., Ltd. (乬SMCC乭, President: Koichi
Tsukihara).
2. Outline of the Merger
(1) Targeted Date of Merger: April
1, 2009
(2) Surviving Company under the Applicable Law: OMC
(3) Location of the Registered Head Office of the Merged Company:
20-27, Nishiki 3-chome, Naka-ku, Nagoya-shi, Aichi
(4) Other
- Upon
separate consultation, the parties will determine the trade name, the merger
ratio, and capital and representative of the Merged Company as well as other
details before the execution of the merger agreement, which is scheduled to
take place in September 2008.
- The
headquarters of the new organization will be based in
- The parties
have the policy of maintaining the Merged Company乫s listings on the First
Section of the Tokyo Stock Exchange and the First Section of the Nagoya Stock
Exchange. Therefore, OMC, the
proposed surviving company, aims for listing on the First Section of the Nagoya
Stock Exchange in February 2009.
- SMFG, SMBC,
CF, OMC and QUOQ intend to increase the voting rights by the SMFG group in the
Merged Company to around the 40 percent range, and will determine the detailed
method thereafter.
- The confirmation
of the Merger is subject to approval by resolutions of the general meetings of
the shareholders, the permissions, authorizations, etc. of the relevant
authorities as required by law, and the necessary consent of related parties.
3. Framework for
Deliberation on Matters to Come
For the purpose of expediting the consultation process
towards the merger, the parties will establish a 乬merger preparatory committee乭
jointly chaired by the top management of CF, OMC and QUOQ. The 乬merger preparatory committee乭 and
its subcommittees specialized in such areas as planning, finance, personnel and
systems will proceed with the preparations in coordination with promotion of the
SMFG group乫s credit card strategy.
4. Proposed Schedule
September 2008 (target)
|
Execution of the merger agreement
|
December 2008 (target)
|
Extraordinary meetings of shareholders for approval of the merger
agreement
|
February 2009 (target)
|
Listing of OMC on the First Section of the
|
April 1, 2009 (target)
|
Closing date of the Merger
|
5. Business Forecasts
(1) SMFG
There will be no revision to the business forecast for
the fiscal year ending March 2008 in connection with this matter.
(2) CF
There will be no revision to the business forecast for
the fiscal year ending March 2008 in connection with this matter.
(3) OMC
There will be no revision to the business forecast for
the fiscal year ending February 2008 in connection with this matter.
6. Corporate Profile of
the Three Companies to be Merged
|
As of August 31,
2007
|
As of September 30, 2007
|
As of September 30, 2007
|
|
Trade Name
|
OMC Card, Inc.
(Surviving Company)
|
Central Finance Co., Ltd.
(Dissolved Company)
|
QUOQ Inc.
(Dissolved Company)
|
|
Description of Business
|
Credit card business
|
Credit card business
Shopping credit business
Loan business
Guarantee business
Money collection agency business
|
Credit card business
Shopping credit business
Loan business
Credit guarantee business
Money collection agency business
|
|
Date of Incorporation
|
September 11, 1950
|
January 28, 1960
|
April 5, 1978
|
|
Location of Head Office
|
16-4, Konan 2-chome, Minato-ku,
|
20-27, Nishiki 3-chome, Naka-ku, Nagoya-shi, Aichi
|
Sumitomo Fudosan Mita Twin Buildings West Hall,
5-27, Mita 3-chome, Minato-ku,
|
|
Name and Title of Representative
|
Hiromichi Funabashi
Chairman & CEO
|
Tatsuo Tsuchikawa
President & Director
|
Shinpei Nihei
President
|
|
Capital (JPY Million)
|
43,343
|
23,254
|
4,750
|
|
Total Number of Issued Shares (JPY 乫000)
|
213,682
|
144,785
|
2,400
|
|
Net Assets
(JPY Million)
|
46,181
(Consolidated)
|
69,877
(Consolidated)
|
32,386
(Non-Consolidated)
|
|
Total Assets
(JPY Million)
|
585,211
(Consolidated)
|
1,195,672
(Consolidated)
|
865,952
(Non-Consolidated)
|
|
Fiscal Year End
|
End of February
|
End of March
|
End of March
|
|
Number of Employees
|
1,296
(Consolidated)
|
2,415
(Consolidated)
|
1,335
(Non-Consolidated)
|
|
Major Shareholders and Shareholding Ratio
|
The Nomura Trust and Banking Co., Ltd. (trust account) *1
(27.44%)
The Daiei, Inc.
(20.60%)
Acom Co., Ltd.
(15.02%)
|
Sumitomo Mitsui Banking Corporation
(14.29%) (8.78%) |
Central Finance Co., Ltd.
(20.00%)
Ginsen Co., Ltd.
(17.08%)
Sumitomo Mitsui Banking Corporation
(11.00%)
|
|
Main Bank of Account
|
SMBC
|
SMBC
|
SMBC
|
|
Relationships among the Parties
|
Capital Relationships
|
CF holds 480,000 shares of the common stock of QUOQ
(representing 20.0% of the total issued shares) .
|
||
Personnel Relationships
|
Three employees of CF have been dispatched to QUOQ.
|
|||
Business Relationships
|
CF and OMC have established a scheme of mutual
complementation to address potential information systems failures.
Part of CF乫s affiliated card business processing has
been subcontracted to OMC.
|
|||
Status of Relationship of Related Parties
|
QUOQ, which is an affiliate of CF, constitutes a
related party.
|
|||
*1 SMBC owns the trust beneficial interest
in the trust assets composed of the 58,633 thousand shares (which represents
27.44% of the total number of the issued shares) held by The Nomura Trust and
Banking Co., Ltd. (trust account). The term of this trust expired on February 8, 2008, and thereupon SMBC
acquired the above-mentioned shares constituting the trust assets, and
7. Business Results of
the Three Companies to be Merged for the Latest Three Fiscal Years
|
OMC (Consolidated) (Surviving Company)
|
||
Fiscal Year Ended
|
February 2005
|
February 2006
|
February 2007
|
Operating Income (JPY Million)
|
139,178
|
145,989
|
155,383
|
Operating Profit (JPY Million)
|
27,739
|
34,886
|
32,740
|
Recurring Profit (JPY Million)
|
27,900
|
35,572
|
33,292
|
Net Profit/Loss (JPY Million)
|
15,823
|
18,363
|
13,944
|
Net Profit/Loss per Share (JPY)
|
74.25
|
85.89
|
65.92
|
Annual Dividend per Share (JPY)
|
10.0
|
17.5
|
20.0
|
Net Assets per Share (JPY)
|
264.27
|
312.20
|
357.57
|
|
CF (Consolidated) (Dissolved Company)
|
||
Fiscal Year Ended
|
March 2005
|
March 2006
|
March 2007
|
Operating Income (JPY Million)
|
98,731
|
106,178
|
106,425
|
Operating Profit (JPY Million)
|
4,527
|
12,871
|
8,491
|
Recurring Profit (JPY Million)
|
5,021
|
13,402
|
8,888
|
Net Profit/Loss (JPY Million)
|
3,205
|
303
|
1,837
|
Net Profit/Loss per Share (JPY)
|
32.97
|
3.02
|
19.12
|
Annual Dividend per Share (JPY)
|
7.0
|
7.0
|
9.0
|
Net Assets per Share (JPY)
|
556.61
|
582.77
|
531.64
|
|
QUOQ (Non-Consolidated) (Dissolved Company)
|
||
Fiscal Year Ended
|
March 2005
|
March 2006
|
March 2007
|
Operating Income (JPY Million)
|
72,803
|
67,319
|
62,109
|
Operating Profit (JPY Million)
|
1,769
|
2,066
|
627
|
Recurring Profit (JPY Million)
|
2,096
|
2,456
|
1,069
|
Net Profit/Loss (JPY Million)
|
1,382
|
2,480
|
(21,562)
|
Net Profit/Loss per Share (JPY)
|
719.82
|
1,291.82
|
(11,230.25)
|
Annual Dividend per Share (JPY)
|
50.0
|
50.0
|
50.0
|
Net Assets per Share (JPY)
|
21,208.33
|
25,283.35
|
13,057.67
|
乮Reference Material乯
[For
Reference] Other Press Release Issued Today concerning this Matter:
SMFG, SMBC, CF, OMC and SMCC
乬Credit Card Business
Strategy of Sumitomo Mitsui Financial Group乭
END
