15 May 2017
Notice of the Conclusion of a Share Exchange Agreement Involving the Conversion of Japan Radio Co.,Ltd. to a Wholly Owned Subsidiary of Nisshinbo Holdings Inc.
As has already been disclosed to the Tokyo Stock Exchange today, Nisshinbo Holdings Inc. (hereinafter, "Nisshinbo") and Japan Radio Co., Ltd. (hereinafter, "JRC")have entered into a share exchange agreement under which Nisshinbo becomes the wholly owning parent in share exchange and JRC becomes the wholly owned subsidiary company in share exchange. As a result, JRC is scheduled to become a wholly owned subsidiary of Nisshinbo.
(Approval is expected to be received at the ordinary general meeting of shareholders of JRC, scheduled for June 26, 2017, and the share exchange is scheduled for execution with October 2, 2017, as the effective date.)
The business structure reform that commenced in September 2012 is slated to progress for the five years through September 2017, and we are now reaching the stage of accelerated execution of the next-stage growth strategy.
However, the operating environment surrounding JRC has recently grown more severe. It is decidedly difficult to be optimistic about the operating environment, as Japanese public-sector demand in the solutions business is falling, marine transport prices are sluggish due to an excess of shipping tonnage, and global competition is growing more stringent.
Given these circumstances, following sincere deliberations and negotiations between the two companies, the decision was reached to convert JRC to a wholly owned subsidiary of Nisshinbo. The two companies concluded that this move was the best way to strengthen the integrated business operations of both companies, accelerate the execution of a growth strategy and cost structure reforms, and enhance the level of governance, thereby augmenting the corporate value of both companies.
Through the share exchange, Nisshinbo and JRC will accelerate the generation of synergies. With the Nisshinbo Group and the JRC Group working together, the two parties will strive to further promote the formation of a structure capable of winning out in increasingly stringent global competition, thereby responding to business partners' demands.
JRC's business will continue unchanged from its previous form, so this agreement is not expected to affect any relationships between JRC and its business partners.
Although the severe operating environment is expected to continue, JRC Group will work together to further develop its business, augmenting product quality and further enhancing services. In this manner, we will do our utmost to play a role for our business partners.
Japan Radio Co., Ltd.